it might suggest that over time since there is a reduction in provisional ballots and i.d. ballots that there are less photo i.d. problems, but it also could suggest those folks are just staying home. number one thing i think it suggests is that provisional ballots are more likely to be filled out by folks who vote democratic, and they are more likely to have i.d. problems. .

let me start maybe with secretary husted. photo i.d. to register but only a signator -- sigget to vote. is there a -- signature to vote. is there a problem with that? >> there are a dozen of ways, as long as it's accepted within your state. if you can get political peace within your state and people can generally agree what the rules are. that's why i love the title, balance. it's a balance. every time that you add something that makes it easier to vote, then you have to balance that with something that also makes it secure. that is -- in the and the more secure you make it you need to

make sure you're not denying access. i think it's a formula that is -- that needs to be accepted state to state. there are any number of ways you can do this. i made a proposal on when photo i.d. was being discussed in ohio and it had the value of being ignored by both political parties because it's -- they wanted what they wanted. they didn't want what was a balance, and so there are any number of ways you could do this. it's about getting people -- again, for me, it's not the policy. the policies can get worked out. there is a good way to run a good election system in your state. it's about setting aside the partisanship and the people that are constantly driving for political advantage at every turn for the rules of voting that are a problem on photo i.d. or any of these other issues. >> do you have something?

>> so professor pitts, to follow up and maybe push back a little bit on your methodology. i wonder in the current climate where voter i.d. news stories and talk of voter suppression is so much in the air, whether it might be a very substantial number of jurisdictions and therefore looking in the provisional stuff does not capture there. >> i think it's unlikely based upon the data that we have that exists. for instance -- and the problem with -- there are surveys of nonvoters that have been done. the problem is finding causeation between lack of a photo i.d. and not going to cast a ballot because people will say, well, i didn't vote because i didn't have an i.d. but i also wasn't registered. is that a person who's not voting because they weren't

registered or not voting because they don't have an i.d.? even if you give them the menu like the weather was bad, didn't like the can drates, only about -- i don't know, 7% of nonvoters say lack of i.d. at least in indiana this was the case in 2008. only about 7% of voters say that was one of many possible issues that they had. so i suspect there aren't that many folks who are out there. at least in indiana, who are deterred. >> let me ask the two secretaries. there was so much, this current season, so much coverage on both sides repeating charges bipartisans about either voter fraud or voter suppression that you have to think that it entered the public consciousness and perhaps had an effect on turnout. for the life of me i am not

sure what direction that was. do you have a feeling? >> for west virginia i know we had a voter identification, photo i.d. bill introduced in march and that did have ramifications. it didn't go anywhere, but there were phone calls, more phone calls than usual for the may primary election and then here because of all of the publicity about voteo i.d. laws that we were having people say, so i need to bring a photo i.d. so much so that we sent a press release out that said, no, photo i.d. required but voter verification required. but that's the way it's been since 10 years since the help america vote act came along. so there are just in the air hearing this. >> yeah, i mean, ohio was discussed as a place that had a controversial new photo i.d. law nationally. we didn't. nothing new on photo i.d. in this election that nothing had changed from previous elections as it related to i.d.'s.

and where we had some people scratching their heads and asking questions about -- with early voting because early voting in ohio is done the same. whether it's by mail or in person. you fill out the same five fields and that's what you do. and we got inundated with calls and i got emails and phone calls personally that said, hey, the board of elections didn't ask me for my i.d. they didn't do their jobs. early voting you don't have to present a form of identification. that's only on election day. so you write that down. there's a lot of confusion about what the rules are. but if you look at the facts on voter turnout in ohio we had a record. early vote turnout by 1.8 million. about 100,000 more than in 2008. but our overall turnout when you added in election day was about 100,000 less.

and so, you know, i don't -- it's not for lack of information when you're in ohio. it's a lack of good information that's the problem. >> so i want to make sure i have this right and you know it's your job to enforce the law, not to write it. you don't need i.d. if you vote early but you do need election -- i.d. on voting day. >> utility bill. or voting early you write your name, address, date of birth, last four digits of your social security number or provide one of these 13 additional items or signature. they cross-check that against the voter database and that's how it works in our state. >> one clarification. are you voting early at your courthouse or are you voting early in different areas? >> board of elections or the designated voting centers. >> ok. in west virginia we have early voting in the courthouse.

we also have satellite. i'm trying to figure out how you guys do that. how you can not ask for i.d. on early voting. >> because you're using the driver's license number or last four digits of your social security number and checking that. before that envelope is opened they check that against the statewide voter data fwace where your signature exists on electronic file and where all of that information exists or the physical copy of it. that's the same thing if you vote by mail. again, you don't leave home to vote in ohio. we have an entire buffet of options for voting and we have built in safeguards for doing so. >> that discussion just got extremely technical. >> it did. sorry. >> but there's a point to be made i think from how technical that discussion was. who are the people who are going to be implementing an i.d. requirement on election

day? they are poll workers who work once or twice a year, get paid very little money and it's tough. and to be a poll worker. and it's tough with all these rules and the more technical they get, the more mistakes will be made. i wonder if there's something that just cries out for simplicity in terms of i.d. requirements, and maybe no i.d. requirements because it adds another layer to the complexity of the polling place process that maybe we don't need. >> well, i would -- there's simplicity would be great. but every time we provide some new access it's accompanied by some new controversy. i absolutely agree with everything you say about poll workers. but let's take it a step further. it's also at our board of elections. we just had an -- we have board

of elections. i'm going to talk -- federal government wants to do one thing in a can help us. send us more money to buy new machines. because our machines are old. our maintenance contracts are wearing out. this is all done at the local level. they got us addicted to these new expensive machines and our machines are getting old and there's no federal dollars to replace them. and then, oh, by the way, budgets are being cut. it's going from the federal to the state to the local. and so we had -- we just had an announcement where the county that was cnn was at, said it could be the most important county in ohio, that their board just laid off a third of their work pours. and now they may be able to come back and replace those folks with temporary workers down the road, but it's talent and training and all of those things that we continue to go on the cheap. we can't run a world-class election system on the cheap.

it's just not possible. you can't ask a system to do more and more and more and more, have fewer resources, older equipment and less trained people. that's not going to work. and it's something that we have to embrace and have a discussion about rather than the shiny objects that people keep wanting to talk about that, you know, that aring from and political pundits have an easy time talking about them because it is boring. it's highly technical. but these things matter when you're administering an election. >> let me follow-up and i think this follows on your point something you mentioned in your presentation that i think for the first time your office sent out objectee ballot applications to every voter in ohio. what was that thinking behind it? >> we didn't want to have lines on election day. the more people that voted early, the less chance that

there were going to be lines on lix day. i like -- election day. i liken the election system to a highway. in the morgue you're going to have traffic jam. in the evening you are going to have traffic jam. so you build more lanes or you build more highways. for us we tried to expand people to vote during the longer period of time, vote from home. that create the lessens the chance for lines at the polling locations. standing in line in ohio was an option because you could have voted from home. you didn't need to come anywhere to vote. but even after all of that in that first morning from the time the polls opened until 9:00, there were lines in certain places because that's when people -- that's when people wanted to vote. but we've been trying to push -- we've been trying to push people to early vote in presidential elections especially because that's when a time -- that's when you run the potential for long lines at the polls.

and so you can get by with the number of locations and the equipment you have if you have more people voting early. >> does voting by mail give rise to a different balance between acts of integrity? is there a different kind of i.d. requirement? >> no. it's the same process voting by mail as it is in person. in the world of no good deed goes unpunished. people say now everybody is getting an objectee ballot, what if they don't turn in? we'll have more provisional ballots on election day. coming out of the process to find a problem where it not existed, we had fewer provisional ballots than we did four years earlier. >> what do you guys think -- let's go down the row. what do you think acceptable i.d. ought to be? >> what should acceptable i.d. be? >> if you think any i.d. is necessary. >> so to be law professor, very

big picture without being specific, which is what we're good at, i think good i.d. would be what a reasonable business person would accept as i.d. in order to do business with somebody. if you actually wanted to conduct a business transaction with somebody but you wanted to make sure the person you were conducting that transaction with was who they said they were, what would you require of them? and that's kind of the way i would look at it. what a reasonably prudent business person who wants to do business. >> professor pitts, what would you like to see? >> that's the question i won't answer. [laughter] >> i don't know. credit card. >> then you can't run for secretary of state. >> i can pull out a lot of things from my wallet. would somebody accept that who wanted to do business with me.

maybe a credit card. maybe an a.t.m. card is enough. >> now that we developed an be a tract generalology, do you have thoughts? >> i tell you what i proposed in ohio is essentially that, look, we have a -- i don't want to demri indicate things. we have a process that's already in place that allows you to vote without a photo i.d. by mail or in person early. and so we've taken care of the first 34 days. we're down to one now. we're down to election day. what would be acceptable then? you could simplify it and use a photo i.d., whatever they can agree upon. or your name, address, date of birth, last four digits of your social security number and your signature. which would allow -- which would prohibit -- which would answer the question of suppression, disenfranchisement, because everybody could vote under that

scenario and that would allow them to cast a ballot without worrying if they forgot their i.d., if they were a disabled korean war veteran who didn't have a driver's license, whatever example you want to use, that would allow everybody to cast a ballot without being denied the opportunity to do so. but, again, i will come back and say, whatever you can get agreement on within your state is the most important because it's the controversy that you don't want. and you need to have reasonable voices try to sort those issues out. >> well, what i wanted with what we do, obviously, has worked because you are showing some form of identification, whether you're registering in person to that county clerk and showing where you -- who you are in person with your address. so that has been quite sufficient. as you can see, i think jon and i will talk off-line about this, because my question would

be equal protection, if you don't need to have a photo i.d. in person but if you need to on election day -- >> you could have both. you could have either option. >> ok. >> and what would the bush v. gore decision be? >> i have a degree in equal protection. [laughter] >> after eight federal lawsuits. [laughter] >> when we talk about -- when we talk about what other aspects -- and i'm a type of person -- and you'll look at some of the initiatives you look to try to find the solution. and, you know, has this been a question in west virginia with the same thoughts that jon has is a process that works that everybody agrees on. that's basically what he's saying. we think, i think that this process that we have in west virginia works. there will be some, as my opponent countered, as there are others in the legislature that will counter, and you are

going to see various ideas come to play. and i have even said this, too, that, you know, i don't stand so strong and hard but as long as someone is not disenfranchised, as long as there's not any cost to it or arbitrary barriers or unrealistic regulations put on it that then you can have these requirements. how do you get to that? poll books might be an option keeping someone's photo iffings within that. that has been some thought that minnesota before their vote recent constitutional amendment vote took place, i know my friend, ross miller, i just saw he was considering this too. this is what i've been talking about in west virginia, i talk about some of our vendors, you know, can you offer meese electronic poll books that are going to be able to store a photo or take a picture so that no one is disenfranchised, that

someone doesn't have to go and pay even $5 for a voteo i.d. you think that's not a lot. $5 for a photo i.d. but it's the $10 in gasoline money to run here. then it's the $10 to run here to get the other i.d. that's what we can't have. right now what i show is what is working in west virginia. that's why it's a bigger picture. that's why it's not a panacea that a voteo i.d. is going to solve all the problems. we have to play -- i'm a sports person. i got to play zone defense on all of this. on every different aspect. we have to stay vigilant whatever voting system we're using, whatever photo i.d. requirement we have. >> it's a very interesting idea. >> i didn't answer your question before and i still ain't going to question. you're asking the right -- >> he's volunteering not to answer. >> you're asking the right

question i think because -- >> thank you, professor. >> you're asking the right question from a big picture perspective. a lot of the debate has been an on-off switch. are we going to have it, are we not going to have it? i think the conversation will move in the next few years to a best practices scenario. what are the best i.d. practices? for instance, indiana makes folks come back within 10 days to show a photo i.d. to validate their provisional ballot. florida, however, does a signature match with their poll workers. what is the best way of achieving the best results? and i hope that maybe the conversation will move in that direction over the next few years rather than sort of this yes-no sort of tension we got. >> and to that point, not all photo i.d. laws are created equal. there are some that are strict photo i.d. laws and some that

are called photo i.d. laws but you don't really need a photo i.d. to cast a ballot under them. a lot of that, i took -- i had -- i heard a lot of this from people saying, the democrats in this state passed a photo i.d. law. it's not really a photo i.d. law. it's sort of photo i.d. light. and you really -- the detailed matter in this about what it looks like before we get caught up. because you're right. photo i.d. law, no photo i.d. law. what does it really mean? >> but the question you should be asking -- i >> i thought i was asking the right question. >> and the question you should be asking, too, is, ok, we have a solution to something, but do we have a problem to go with the solution? >> i promised the audience a chance -- >> and statistics will say, no, we don't have a problem for some solution. >> this is close to consensus that in-person voter fraud by

impersonation may well be a problem that doesn't exist. but let's let the audience have a chance to ask some questions. there's some microphones if you don't mind coming up. >> there's a lot of debate but not a lot of facts around -- >> we don't have a lot of time so let's keep the questions nice and crisp. >> there's a lot of debate but not a lot of facts about the impact of voter i.d. but having a 29 day registration deadline. do we think technology has changed enough and practices have changed enough that we can get rid of that 29-day deadline because that does stop people from casting a ballot? >> you're doing as good a job getting answers as i did.

>> i want to talk to election administers and how they're doing this because they still have to deal with paper. i thought at some point that a 30-day requirement will be called unconstitutional. 10 or 15 years from now maybe. we will do everything at registration for everybody everywhere. >> look, we have same-day registration in ohio for five days of our early voting period, and there are examples of people who are registering -- it's currently being investigated in cuyahoga county -- addresses that are vacant homes and they are actually registering there and having ballots counted. i think that when you get into same-day registration voting, i can tell you in a swing state that is highly competitive that that is a place that you'll run into fraud. we are already running into it,

and it is a problem. >> west virginia, 21 days out. clerks will tell you that they need that amount of time. ongoing debate in west virginia. >> we catch it because it's 35 days before the election, but if you do it on election day, then you got a problem because then you're going to hold up the results as we're trying to collect and check against all of those issues because there are legitimate problems. maybe 30 days is too long, but i don't think you can do it on election day without some chance of being able to back up and take a look at those before election day. >> i'd love to split the difference with you. >> yes, sir. >> secretary husted. i was part of the team that sued you in ohio. [laughter] >> finally a face. [laughter] >> and part of the team that put the referendum on the ballot. i agree with you that the details are what matter on this. so i just have a question for you. why in your so-called balanced

bill did you try to eliminate the 30 days you tried to herald and then end the last three days of early voting so far as to take it all the way to the supreme court? >> ok. first of all, i don't herald the 35 days. that's what it is. i think -- i think a period shorter than 30 days where you don't register and vote on the same day would be a good reform in ohio. i don't know that the difference between 28 and 35 days should cause anybody problems. i think my recommendation in that proposal was 28 days. that we would have early voting. the last three days was a bipartisan recommendation that came from a bipartisan group of election officials that said if we're going to have all of this early voting where we're going to have balances of ballots in the process of being sent and returned, we need some time to make -- to synchronize the voter rolls so we know who voted and who didn't on election day. whether that needs to be three

days or not, probably doesn't need to be that long, but that's what they asked for and that's what the legislature voted for in their bill. and they voted unanimously on a bipartisan process. i just have to defend the laws that they pass. it's, you know, by the end of the election process, you know, whatever. i just want to run an election. you tell me what the rules are. let's not fight about the rules all the way up until the election. >> yes, sir. >> fighting all the way through the election in florida, by the way, also. question i have for ohio and west virginia. do you have real i.d. in your state? >> yes, in west virginia. we are one of the first states to start implementing that. >> florida is a real i.d. state. for those that don't have real i.d. that's going to be really fun, particularly for your female voters. you have to show up with your court record you have to show up with a marriage certificate.

men don't have a problem. >> maybe same-sex marriage will change it. [laughter] >> it's a really complex law because florida has no match no vote at the front end. you are not eligible to be registered unless through our voter registration database you match up with the department of corrections, you're not a felon. you match up with highway safety. you have a valid driver's license that matches and we can corroborate the last four digits of your social security number, you pass that you're allowed to be registered. that's how florida allows for an individual that has no i.d. to sign a provisional ballot and sign the signature because take that signature back in the office and compare it to the dabe to confirm that this -- database to confirm this is the same signature to the person we cleared a year, 10 years og. now we know you are in fact eligible. this is the sort of the different model than depending upon the picture i.d. on

election day is checking before we put you on the rolls to confirm you are eligible to be a voter. that should be part of the discussion as well it seems to me. >> ok. thanks. >> my question is for secretary husted. has to deal with uniformity. i think a lot of the conversation that happened over the last couple of years focused on uniformity. i agree with you on the premise of uniformity but i think we disagree on what that definition exactly is. the problem that we saw is the strive for uniformity in the process black and white. one, early vote location. uniform of absentee voting practice. we know in cuyahoga county 3/4 3/4 of the early in-person vote was cast by persons of color. so limiting the in-person voting window but not maintaining the male vote

window had this disproportionate impact. we know that the number of voters in an urban county are significantly higher than the rural county. >> i don't agree with your conclusions, first of all. you asked a question about uniformity. look, i just want to make sure that the rules are the same so that betty jones who's voting no one county has the same access to the ballot as betty jones in another county. the access is not about a county. it's about a voter. what access does a voter have? for the first time we set uniformed rules and laws so that every single voter was treated equally. just for those of you who don't know how it used to work. the counties used to set their own days and their own hours and some county some voters got absentee ballot requests. some didn't. and what i said is that everybody should be treated the same. all 88 counties, every registered voter, active registered voter should receive an absentee ballot request.

the days and the hours in all counties should be the same so that that voter, that individual voter has the same access within every county. that's what we had. and i believe that is what we should have in any election system. >> but if the rules for county of 5,000 is different than a county of 400,000, it is different because the number of voters going into one location are drastically different. >> and they have ample number of machines that they can use to accommodate that or they can move to a new site that's even bigger that acome dates all of that. it is just as hard for a rural voter who lives a long way from their county seat and doesn't have access to public transportation, whether they're in a small county or not, to actually get there and cast a vote is it is for any voter in an urban county who has public transportation and has a number of ways that they can get there. >> one more question.

>> might actually be a good follow-up to the question before. so my question is actually for mr. pitts. it's the second time we heard from the sfage today that because voter i.d. only impacts a minority of people, it's actually not something to be terribly concerned about. so i think the only statistic we've seen on voter i.d. today is 7% name it as a factor in deterring them to vote. i think what passed it very quickly -- so equating it is a small number with it not something being concerned about when we know the margin of election is. i'm interested in hearing people's perspective on small versus important. and then the other thing is, i got to work on the pennsylvania voter i.d. case this year and interview people in d.m.v.'s in pennsylvania about the experience they were having and testified in the case. the stories are harrowing of people who didn't wear their colostomy bag for a day because they didn't want to have to use

it. or people in wheelchairs got sent to three locations because the people didn't know where they were going. veterans who showed up with i.d.'s and disabled and waited for 10 hours. people with misspellings and waiting with their child. one, small vs. important. the second, even if we believe these laws are correct and we should have them, can we implement them in a way in a is fair? >> i'll take your first one. i think you can look at the numbers that are generated from the primary election. i got numbers from 2008 general that show about 1,000 folks not being able to cast a accountable ballot because they lacked i.d. you can look at those numbers and say that against the amount of in-person voter fraud means we shouldn't have i.d. laws. i don't necessarily think that those numbers prove the point in a, you know, i.d. laws don't matter. they do matter to individuals, that's for sure.

>> thank you and please join me in thanking this really terrific panel. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> the u.s. house is in recess until 2:00 p.m. eastern today. about half an hour from now they'll start with one-minute speeches. when those are done the house will recess again, come back at 5:00 eastern. consider a motion to negotiate with the senate on a compromised defense authorization bill setting policy for the next year. recorded votes will take place at 6:30 p.m. eastern. you can see the house on c-span. the house hearing on the conflict in the democratic republic of congo. and rwanda's involvement in that country. u.n. security council experts alleged rwanda support of rebels against the congolese army after last month's cease of the city of gomea by a rebel military group. that hearing by house foreign affairs subcommittee will begin live at 3:00 p.m. eastern. you can see it on c-span3. also a look at the republican

party in the 113th congress. hear remarks from republican congressman jim jordan and steve scalise on the future of the conservative movement. they'll be speaking 3:30 eastern right here on c-span. >> belittle me. strangle me. >> he's not safe on that bus. >> i've been on that bus. they are just as good as gold. >> as all of us i think in this country, we're starting to see people coming out and talking about their experience of this if he none none that so many of us -- phenomenon that so many of us experienced one way or another and had no words for other than adolescence, other than growing up. finally people will starting to stand back and say, hold on. this isn't actually a normal part of growing up. this isn't a normal rite of passage. i think there was a moment where there was a possibility

for change. and director lee hersch and i started that film out of the feeling that voices were kind of bubbling up, coming up to the surface to say this isn't something that we can accept any more as a normal part of our culture. >> filmmaker cynthia lowen gathered essayed and personal stories today in "bully." hear more saturday night at 10:00 on "after words" on booktv. like us on facebook. >> we are hearing that president obama may make an appearance at today's white house briefing. that briefing set for 1:45 this afternoon with jay carney. c-span2 will be covering that live. and now bob woodward on his latest book "price of politics." he spoke with "politico's" chief white house correspondent mike allen and failing to chief a compromise.

this is part of a "politico" playbook discussion. it's about 25 minutes. [applause] >> good morning. welcome to "playbook breakfast." thank you for coming out so early. we're excited to have an amazing double-header today. we are going to talk to senator rubio who last night gave a big speech, one of the first formal speeches looking ahead to the future of the republican party. we are going to talk to senator rubio about that. first we have the amazing treat of bob woodward who has a fantastic book out on the last grand bargain negotiations, is going to be joining us in just a second. first, welcome, all the people out in livestream land. we'll be taking your questions

on #politicobreakfast. tweet us. welcome to c-span and to others. we're appreciative to the bank of america for making these conversations possible. we had a great partnership this year including the conventions and election night. so we're very, very excited to bring these substantive conversations about the most important issues right here in washington, thanks to you to the bank of america. thanks to you, john, and thanks to your colleagues. so you may have gotten cards. we're be bringing you into the conversation. so be thinking about what you're going to ask. so without further ado, we'll bring in bob woodward. mr. woodward. [applause] >> which is your chair? >> you get the daddy chair.

>> thank you. >> so the price of politics, which has become a bestseller, as all your books do, looked at the last cliff, negotiations over the previous grand bargain that didn't quite get over the finish line. what does that teach us about the current cliff negotiations? >> well, it's groundhog day. the question is who's playing bill murray. and i mean, such a repetition. it's the same players at the same seats at the table with the same doctrines. so where this goes, i think anyone who thinks they know is wrong. some people say it's a fiscal cliff. some people say it's a slope. some say it's a bungee jump. some say it's a skateboard trip. it's going to go down and up

and so forth. bottom line, i think, it's no way to govern. it is a giant mistake to have all of this in a pool of ambiguity. as i understand it, you may know more, it truly is a stalemate. they are not talking. >> you point out it is the same players. i think you'll agree players that matter most is the president, speaker boehner. what do we know about their personal relationship that might illuminate what's going on right now? >> well, they started out last year when they were working on the debt ceiling and they had what are called the measure low and nick -- merlot and nicoret meeting. boehner would have merlot and the president would be chewing

nicorette gum. and they had ice tea for the president. and boehner would have his cigarette. they put the cigarette away for the picture. they haven't closed the deal only the personal relations. that's a shame. somebody, instead of sponsoring your breakfast and all, you should sponsor a weekly dinner between obama and boehner and everyone would agree to pay for it and let them just talk and get to know each other and -- it's -- oh, john. that's right. what do you think? >> i think that's a great idea. would bank of america pay for it? [laughter] a special room. you mow, but i think personal

relationships. when john was the f.b.i. spokesman, he was often not helpful, but you could always talk to him and get him on the phone. if you had a good story, he would confirm it by laughing. a deep laugh meant you were on the right track. no laughter meant no. >> now, it looks like the tide is very much going against republicans. do you agree with that? >> well, no. i think in the short political terms, yes. the polling shows republicans will be blamed, but remember this is the obama era. it's going to go down -- it is his economy. i asked people, who was speaker of the house during the great depression when roosevelt was president? i'll give $100 to anyone who

can name who the speaker of the house was in the critical first 100 days. >> jim would know. >> henry thomas rainey. that's a name that's in the history books. point being, speaker boehner's an important player and this is significant, but it is obama's job to lead and define. so if there are negative consequences here, particularly in the economy, it's going to be in the obama era things didn't get fixed. who is it, the australian finance minister, the united states is one budget deal away from being a great country. and there are a lot of people in business who think we are poised to do some really good things in the global economy, the united states is, but if we

can't untangle this mess, it's not going to happen. >> you know more about the inner workings of our government than any living person. every single administration of our lifetime, you've behind the scenes. you've seen our national security notes. >> what nonsense you're talking. >> are you now optimistic or pessimistic about the way that that australian finance minister posed the question? >> in the end, i think things will be fixed. the question is when and what price do you pay on that road to getting them fixed. and, you know, i don't think you govern by playing chicken. and i say that to democrats, republicans, the white house, the congress. you know, they should sit down and really talk this out and

the old joe biden way when he would deal with mitch mcconnell just a couple of years ago to extend the bush tax cuts as they -- in the white house they called biden the mcconnell whisperer. and the -- as in the horse whisperer, and the way one for you, one for me, one for you, one for me. that's hard and that's -- but that's the way you make a deal. >> so at this moment does it look to you we have a deal by christmas eve, new year's eve or do we go over the cliff? >> who knows. somebody who thinks they know is only guessing. maybe there's some strategy in the white house that, you know, by a certain date they'll work something out. >> playbook we always start the morning with the papers. we still love the print papers. mr. woodward is assisting editor of "the washington post"

which this morning says fiscal morning is yet to fade. the stock markets are convinced that the fiscal drama is going to work out. the "financial times" has the opposite headline. they say wall street anxiety grows. so which of these is more true? >> on wall street they live in the zone of eternal and unpeaceful coexistens of optimism and pessimism. you can talk to somebody who's in the investment world on wall street and in the morning they're optimistic and in the afternoon they're pessimistic. so i think probably one, you know, don't know. both papers have great reporters and they're talking to people about that and so forth. if you look, i would go with the "post," in the short run because look at what the

markets have done. they haven't sunk 689 >> when you talk to people behind the scenes offcamera, when your tape recorder is off, what do they tell you what's likely to happen? >> i think there's a lot of real worry. i -- >> worry about what? >> worried that we aren't going to fix the -- look, what's the bottom line here? the fisscal house of the united states -- fiscal house of the united states government, the financial house is not in order. it's in disarray in a way that no one would permit in their business. bank of america, right, john, they would never permit this kind of incould he hearnes in what the -- incoherence of what the policy is. >> last question about this topic. based on your reporting, what you've learned behind the scenes, how far do you any the president is willing to go on entitlement cuts? >> well, that, when i talked to the president in the summer on

in, he acknowledged quite openly that it was bad politics for he and democrats to say we're going to cut medicare beneficiaries. he then went on in -- i think in the end you can't be president and not be a realist. and he said that it is untenable to not cut them because they're driving the budget deficit. the whole entitlement issues, the real core of this problem, the taxing issue, yes, the pyrotechnics, and there's the struggle between the republican and democratic view, but all the numbers people know that it is the entitlement issue. so if you can come up with some sort of fix, trajectory to make

it somehow stable, that would be -- that's the real issue. uh-oh. you have something from the book. >> your books are all ultimately about power. how it's used, squandered, built. so the subtext, the events you write about is how washington works. my favorite sentence in "the price of politics "qurks, when you meet friends it's too late to make them. tell us what you learned about washington and life from the grand bargain, what is the 100-year lesson from how that unravelled? >> you mean last year, what happened last year? well, they found a way to postpone everything. and, again, they can postpone lots of the problems, but postponement is the theme. the cliche of kicking the can down the road. i don't know what the can is. but it is postpone the hard

decisions. and too bad. they should make the hard decisions. i think if, you know, the hypothetical weekly dinner between the president and boehner, if that occurred, or if it was a weekly golf game. it's weather where we can go back to golf, that would be such a good and fruitful thing because, look, what -- trying to write particularly about presidents, you are driving at the question, who is barack obama? now, you live in this world. do you think we fully understand who barack obama is? do you? >> if anybody does, you would. >> no. i'm asking, do you? >> of course we always want to know more about the people who govern. >> do you think there is that kind of -- do you find elements of mystery or uncertainty in

his actions and personality? >> of course. that's why he's fascinating to cover. >> yes. maybe in him, i mean, one of the things -- i mean, you covered george w. bush. i wrote four books on him. there wasn't a lot of mystery about what bush felt and what his -- >> gut player. >> yes. gut player. as he said, his job was to put some calcium in the spine. but i think obama is a little bit more of an uncertain figure. quite frankly, i think when he writes his own auto biography in his time as president and there is more excavation of all of this, we are going to discover that he's working it out as he plays the game. and somebody with a little bit more experience under their belt might not be doing that. >> some of the comments you made about president obama,

including what you just said, there is a subtext that you're a little disappointed or underwelmed? >> it goes to the question, what's our job in the news media, and our job is not to be cheerleaders. our job is to be -- "politico" specialized in this 24/7 irritant. not in a hostile negative way but you are asking in raising questions. it is -- that's the job. so obama -- look, what's happened in the last many decades in the presidency? increasing concentration of power. there's the catastrophe in japan, in the united states they immediately want to say, what is the president doing?

what is he saying? what's the policy? what's the action? 30 years ago that would have been one of the questions, but it wouldn't be a central question. presidents have -- it's amazing what they can do. i think obama has more power than bush had, for instance. >> and yet i believe it's your view that we know less about our presidents, less about the inner workings about the white house. why is that? is that our fault? >> well, it is in part our fault. and i think the message managers in the white house get better and better and more skillful. that it's a barrier often, and you have to -- god knows how much time i spent breaking down -- breaking that logjam in the white house saying i'm doing this book. i got these stories. i got these memos. i got these notes. ok. we'll answer questions. it's not something where they're standing there on pennsylvania avenue saying to

the reporters, come on, we're dying to have you hold us accountable for what we're doing. >> you do manage to break people down. what if the white house said, we're going to shut bob down? no access, no memos. anyone will be fired if they helped woodward, what would you do? >> probably do another book like john belushi or something like that. you know, i don't know. i think that they -- look, there is a sense in every white house, whether they're misguided or not, whether they're on the right track, that they're doing a good job, that they're sincere, and our job is to listen. i think the key is to take them as seriously as they take themselves. when i sent bush or obama long memos saying this is what i want to talk about, they look at it and say, my god, somebody's worked a year on how

i'm doing my job. of course i'm going to respond. >> and that's a very unusual technique. you wrote hundreds of questions for bush. what did you send president obama before you went and talked to him for "the price of politics? >> about a single space dozen page memo. these are the key points and this is what i understand happened. much of it was new. and i think somebody is going to look at this. 21-page memo on one of the books, i remember, and colleagues at the "post" said, you've finally have lost your mind. >> i love the finally. >> because there's no evidence in bush's whole biography, his years at andover, yale and harvard business school that he read anything more than 21 pages. and that he read it right away. and condi rice called me and

said, you are doing this book and these articles from the "post," whether or not you talk to the president and i said, sure. and she said, he'll see you tomorrow. >> has it gotten more easier or difficult? >> that's a good question. no, i think it's more difficult because the message managers are better. you know, they have staffs and they work at it aggressive plea. i'm older and i have less energy. so that makes it harder. >> and tell us something about the obama white house that we don't know. >> what does obama think of mitt romney? what does he really think? and i think he feels that romney is incompetent because he didn't run a better campaign. and i suspect that one of the

themes in all the coverage of the campaign is going to be romney never found a way to -- either the method or the theme of how to run against obama. whereas they thought it was going to be easy. >> we're about to give the hook here. what is the one thing you would like to know about president obama that you don't? >> oh, i did ask him this. i didn't put it in the book. he keeps a diary. and so i'd like to have access. [laughter] >> assume that's for -- >> do you keep a diary? yes. not on all this detailed kind of -- let's see it. so that's going to -- i'm sure he will write a really

interesting memoir. >> what did he tell you about the diary? >> that it existed. no detail. he didn't offer any of it or read from it or anything like that. i'm -- is it dictated? is it written? you know ronald reagan kept his deiry that was secret. george w. -- and now they published all of reagan's diary. i mean, who would have thought? certainly obama much more a sense of history and literature and writing from his own books and so forth, which are very kind of address the question, what's the inner life i am living? and it's very interesting. before he became president. it's really interesting now. and a description of that inner life will, you know, be

something if it's candid. so let's -- i'm going to put it in the freedom of information act request for obama's diary. maybe it's done on government time and maybe the diary itself is a g.s.a. notebook or something like that and so they can't -- not going to get it. i look for -- i worry what we don't know and i'm sure it's larger than what we do think we know. >> about -- >> about any -- about him. about what he's doing. what's driving him? who's barack obama? >> and last question about to get the hook, the meltdown over there. do this very quickly. you were talking about the president is a man of mystery. you are a man of mystery yourself. everyone in this room is fascinated about how you do what you do. and one time you told me about

how you reached a general who wouldn't take your call. >> wouldn't take the call, wouldn't be interviewed. it was a key general on i think the fourth bush book. and so i found out where he lived. what's the perfect time to go visit a general? at night. 8:15. because they would have eaten. if they're home, there are a couple of extra hours there. so i knocked on the door without an appointment and he opened the door and looked at me and -- can i quote him? and he looked at me and he said, are you still doing this shit? >> bob woodward, thank you so much. thank you for your journalism. [applause] >> in a moment the u.s. house will return from their recess for one-minute speeches. after that they'll recess again

until 5:00 eastern to consider a moment to negotiate with the senate on a compromise defense authorization bill. and now live to the house floor here on c-span. chaplain conroy: let us pray. gracious god, we give you thanks for giving us another day. throughout history you have been ever present to all believers. in times of darkness we readily turp on light. millions of americans in this season have variously turned to the celebration of the christmas season with its trees and lights and hanukkah, the festival of lights. even so, in our political world there remains the reality of considerable disagreement and contention. where there is darkness here, send forth a spark of inspiration and grace to enlighten minds and warm hearts to respond to your love for

your people. eternal father of us all, fill your children with the delight that comes from light. may we walk no longer in the darkness of distrust, but join together in mutual understanding and peace toward the common well-being of our nation. may all that is done this day be for your greater honor and glory. amen. . the speaker pro tempore: the chair has examined the journal of the last day's proceedings and announces to the house his approval thereof. pursuant to clause 1 of rule 1 the journal stands approved. for what purpose does the gentleman from illinois seek recognition? >> mr. speaker, pursuant to clause 1 of rule 1, i deplanned a vote on agreeing -- i demand a vote on agreeing to the speaker's approval of the journal. the speaker pro tempore: the question is on agreeing to the speaker's approval of the journal. those in favor say aye. those opposed, no. in the opinion of the chair, the ayes have it. the journal stands approved. mr. dold: mr. speaker, i object to the vote on the grounds that a quorum is not present and i make a point of order that a

quorum is not present. the speaker pro tempore: pursuant to clause 8 of rule 20, further proceedings on this question are postponed. the pledge of allegiance this afternoon will be led by the gentleman from south carolina, mr. wilson. mr. wilson: everyone, including our guests in the gallery, please join in. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the speaker pro tempore: the chair will now entertain requests for one-minute speeches. for what purpose does the gentleman from south carolina rise? mr. wilson: mr. speaker, i ask unanimous consent to address the house for one minute and to revise and extend my remarks. the speaker pro tempore: without objection. mr. wilson: mr. speaker, on sunday the president and house speaker boehner met to discuss the impending fiscal cliff. the next day the president jetted off to michigan to

campaign for tax increases instead of staying in washington to work on a possible plan. with a national debt of over $16 trillion, washington's out-of-control spending is placing our national security at risk. clearly spending is a threat with an increase of 93.5% over 10 years and revenues increased only 15.7%. raising taxes on the american economy will destroy jobs. reports have indicated that raising taxes on the top 2% will generate up to $80 billion a year. this amount of money covers less than 10% of our nation's annual deficits. it's my hope that the president will address the fiscal cliff to work with house republicans to promote small business job growth. in conclusion, god bless our troops and we will never forget september 11 and the global war on terrorism. the speaker pro tempore: the gentleman's time has expired. for what purpose does the

gentleman from illinois rise? mr. dold: to address the house for one minute and to revise and extend my remarks. the speaker pro tempore: without objection. mr. dold: thank you, mr. speaker. mr. speaker, today i rise because the fiscal cliff is upon us, and one thing that i know is clear in talking to my constituents, time and time guenther' looking for solutions to the problems that we face. -- again, they're looking for solutions to the problems that we face. the solutions will come from us working together, forging a bipartisan solution to the problems that we face and i hope we can go bigger than what is simply asked of us. mr. speaker, one of the great pleasures of being here is to be able to work with good friends. and i want to thank my good friend, steve latourette, and jim cooper as well, for putting together the cooper-latourette bill that is based on simples-bowles, helps raise revenues and -- simpson-bowles,

helps raise revenues. today i'm asking my colleagues to join me in putting a bipartisan solution on the table. i want to thank my good friend, steve latourette, and jim cooper. with that i yield back. the speaker pro tempore: the gentleman yields back the balance of his time. for what purpose does the gentlelady from texas rise? ms. jackson lee: to address the house for one minute. the speaker pro tempore: without objection. ms. jackson lee: i thank the speaker this morning and this afternoon, and i am grateful for the words, prayer that were offered about light, both of inspiration and collaboration. i think that there are bipartisan voices crying out for an acceptance of a tax cut on 98% of the american people. that is why the president went to michigan to speak to working men and women, to be able to reaffirm their voices that were spoken so loudly on november 6. let us have a tax cut that will impact 98% of the american people and businesses and let

us collaboratively work together for the steps going forward. let me be very clear. having spoken to physicians yesterday, meetings in hospitals, you cannot raise the eligibility rate of medicare recipients. it just will not work. you cannot judge a person's physical condition between 65 and 67. that is not the way to balance the budget and reduce the deficit. we know that entitlements, social security, is not the issue. mass -- pass the tax cuts on 98%, mr. speaker, and work collaboratively in 2013 to find a pathway forward to make this economy the growing economy that it has begun to be. i ask my colleagues, let's work together. i yield back. the speaker pro tempore: the chair lays before the house a communication. the clerk: the honorable the speaker, house of representatives, sir, pursuant to the permission granted in clause 2-h of rule 2 of the

rules of the u.s. house of representatives, the clerk received the following message from the secretary of the senate on december 11, 2012, at 11:08 a.m. that the senate passed without amendment h.r. 3187, that the senate agreed to senate resolution 612. with best wishes i am, signed sincerely, karen l. haas. the speaker pro tempore: pursuant to clause 4 of rule 1, the following enrolled bill was signed by the speaker on friday, december 7, 2012. the clerk: to authorize the extension of nondiscriminatory treatment, normal trade relations treatment to products of the russian federation in muldova and to require reports on the compliance of the russian federation with its obligations as a member of the world trade organization and for other purposes. the speaker pro tempore: pursuant to clause 12-a of rule 1, the chair declares the house

in recess subject to the call of the chair.

>> we decided to start the film out of that feeling that voices were kind of bubbling up, coming to the surface to say this isn't something we can accept anymore as a normal part of our culture. >> cynthia lowen has followed up her film by gathering essays and personal stories together in "bully" hear more saturday night at 10:00 on "afterwards" on c-span2. find more book tv online, like us on facebook. >> now the government's role in innovation and the economy taking part in the discussion, glenn hutchins, a former

advisor to president clinton, and susan molinari, google's vice president, hosted by the center for american progress. it's about an hour. >> susan, as always. that's a really tough act to follow. >> for sure. >> i am delighted to be here. tell you one quick story. i did a column one time in which i referred to her as the sugar ray robinson policy director. for those of you here who are noort boxing fans or don't remember sugar ray rob join, about 99% of the audience, he was pound for pound the greatest boxer in the history

of the game. sugar ray robinson policy record, when i see her i say high sugar. >> i was wondering why you say that. >> one of my younger reporters overheard this one time and said to a colleague, god, is he old. it's a different generation, isn't it? i'm sorry. sugar. >> i'm glad you explained that. >> you were worried, too. it's terrific to be here. what a great panel. glenn hutchins is the founder of silver lake. he has been probably -- there's been no private equity guy who has invested in as much in technology and innovation. his -- he is a tremendous asset to drew fast at harvard. as a great advisor and harvard management committee, i guess, and his real claim to fame is he's the part owner of the bosston celtics. if we -- boston celtics. if we start to in any way -- we

aren't achieving what we want, we'll talk about rondo today. glenn is really a great -- he's one of the smartest people i have ever met in this business. jonathan teaches at the university of pennsylvania. medical ethics and health polcy. he's written 150 books. used to say about pat moynihan when he was in the senate that pat had written more books than most senators had read. 150 books, i am dazzled by that. >> aim getting to 150. not there yet. >> i exaggerate. >> you're entitled. journalists do. >> he is also a senior advisor at the center for american progress. which is very interested in those subject and has written all about t susan, we have to stop meeting like this. we have done more seminars -- >> exactly. both conventions. it's been great. >> susan has been a rock star since she was --

>> since you used to yell at me over the "crossfire" desk. >> her dad was a very distinguished member from staten island in the house of representatives. she succeeded her dad in that seat. was only in the house for i think seven years. it's remarkable because she rose to a leadership post, she left a real mark. and since she's left, she's done a lot of interesting things. the most recent of which is she runs google's washington office. so she really is a woman who always has been in the cutting edge of things that matter. it's great to be here with all of you. let me start off by saying, i don't think there is an anti-innovation caucus. i don't think there is anybody who says, boy, i'm opposed to innovation. it's like apple pie or for us in washington, rg-3. everybody is for it. but let me ask you all to describe what we really mean by innovation, and what are the two or three priorities we really ought to be talking about when we address this

popular subject? glenn? >> start on that side. >> it's so rare i go to my right first. >> all right. from the business perspective, i'll offer from the business perspective, there are three types of innovations we think about in our world which is, one, is the underline basic scientific innovation that creates the discovery that allows commerce to make the second innovation, which is the technology innovation, which is to take the underlying scientific discovery and commercialize it. turning it into a product that can be used for customers with an enterprise or consumer customers. third innovation, which is less well understood, but is equally important, is what i think of as called business model innovations, which is how you can take a technology -- discovery that turns into a technology and you can deliver

it in a way that allows you to build a business that gets you a margin that can support the business and return on the capital investment in the business. so basic science innovation, technology innovation, and business model inin vations are the ones we think about. google is a good example of all three. so one -- i'll end this thought and come back to it later, one anecdote, i was on the board of a major company that made struts years ago. they had about $13 billion, $14 billion in revenue. that revenue came from -- 90% of that revenue came from products that were 120 days or less old. so they had to reinvent nearly $13 billion of revenue every 120 days. these were incremental innovations on a basic understood technology. that's basic -- all the disk drive companies. the file cabinets on your

technology device you have. but the point is that that company is in the process now of making products that are creating innovation. the i novation has to occur at all three levels inside that business on a continual basis for it to deliver. it's one of the major reasons why these devices we have here are -- two major reasons are so small and powerful is because of the processors and storage. by the way in storage there's something called moore's law in processing, storage the greater change is double every nine months than 18 months. twice the rate. so but the point is in the technology world you have to think about the companys producing innovation not producing products and services in order to stay ahead of the curve. >> jonathan, you want to pick up on this? >> i'm sorry. i'm a philosopher. i don't know how to innovate.

and what strikes me about innovation, of course, is that -- this is something the president gave us a good example a few minutes ago, retroviruses and basic medical science turned into very important, as part of the treatment, and understanding of hiv-aids. years later. if you think of the internet it was packet switching, then turned into the internet and finally the web. there's a myth about americans that we only care about application n fact we are the most effective basic science producers in history. now, the founders, to use an overused cliche, had innovation in their d.n.a. the articles of confederation required standards of weights and measures, constitution,

article one, section 8, requires standards to weights and measures, nist, the most undervalued, it seems to me, agency of the united states government were respect to innovation, is the embodiment of this constitutional requirement. so we need to have government investing, that's one of the conditions of innovation, the founders article one, section understood hamilton was in favor of prizes for invention, which he took some hits for. but he turned out to be right in that respect, at least. so it is about money. especially in the modern world. a lot is about money. it's not only about money. they include abopen society which we can exchange ideas, and among those conditions also is standardization. what are we talking about when we talk about a particular fundamental measure of some basic material that is going to be part of technology? so, the money's very critical. we do have, i think, a problem and the president alluded to this with respect an old model, especially in the life sciences, basic science, and

applied science. life science, this is a problem. interestingly, i'm on panel right now on emerging technologies, and the d.o.d. has a third category, advanced technology development. this was news to me. so a.t.d. is this transition from basic science to the application and technology. it's not about hardware it's about systems and subsist thames and components. i have to say -- subsist thames and components. i have to say in some areas academia has something to learn what's happening in the way the defense department is modeling the development of new technologies from basic science. >> i have a follow-up. >> obviously sitting here working for google for the last eight years, darpa was one of the initial thinkers of the internet. which was then brought in collaboration with another university on the other side of the country from harvard that

brought larry and sergei together based on their education at a higher level to create google in private industry, if you want to declare the garage as private industry. to me sitting here google is sort of the epitome of the way all those forces come together to create what i think of innovation now, and that is what larry page said when you first apply to google, one of the things you have to learn rightway is his line is, he wants you to have all the people at googling a healthy disregard for the impossible. and that is something particularly after coming out of government, i really took me a while to shift my brain to work that way. let me answer the question in two ways in terms of innovation and i do want to bring it back to what president faust was talking about. what concerns me so greatly when i am allowed to stand on the precipice of a company that

is constantly creating and innovating because of this healthy disregard they have for the impossible, like google, when i'm working with entrepreneurs and venture capitalists who also invest in that notion of no guarantees, but a sterling ride, in working with educational institutions that also want to grab that, i have some great concerns for where we are going as a country. i just going to give two statistics because when you talk about global competitiveness, which we talked about, some of the numbers that i have learned since taking this job, which i guess we all sort of intuitively know, in that the united states is ranked 52nd in temples its quality in math and science education. i do believe that that is something that we really need to focus in on as the united states. it slipped to seventh place in global competitiveness. the good news is we are still number one in innovation. that gets to the humanities aspect of it, does it not? i don't know we can carve up and say we need to if he cuss only on stem. although clearly we do as the

mother of two girls we need to focus on stem for females because i have to tell you if i thought the united states congress was male dominated now that i am in the tech industry, i am he often times one of the only females in the room. -- i am oftentimes one of the only females in the room. i guess by closing i think it's the healthy disregard for the impossible, that comes from a real solid grounding that we need to get in the younger grades. clearly once we get to a higher education we are not in the situation. but for many kids it's a little too late unless schools want to continue to do that remedial that the president talked about. but i do think if you are going to talk about a healthy disregard for the impossible, you also need that early attitude in the grammar school and elementary school levels in the humanities and what we have done in the past and where we are going in the future if they are going to have that healthy disregard that promotes

innovation. even under the best stem education, you have to learn how to think outside the box or not see the box at all. >> we want to talk about, i think in large, what role government can play to facilitate and not impede innovation. let me take the very short term first. the fiscal situation we face now. how important is that to businesses, to create -- job creators to get this issue resolved and not have it hanging over us for the next four or five years? or is this just basically indigenous washington that isn't going to affect those groups much? >> so to coin a phrase here, being in washington is oftentimes for us businesspeople being in a town that has a healthy disregard for the possible. >> i set you up for that, didn't i? >> so i make a couple comments. based upon recent experience.

the -- what government can and should focus on is things which are in their control and really important to get done. so a lot of what creates innovative companies, innovation in the country is outside of government control even though it's -- even though it's important to get done. the most important thing right now that government has 100% in its control that it can get done is solving the fiscal cliff. everything else follows it. there is nothing more important today than doing that. and the -- i have been -- this is all very public, i met with the president, talked about it. i am involved in this issue. everything else is waiting in abeyance for that to happen. there are huge economic and potential market consequences to get that done full stop. that's kind of -- now having said that i'll move on. i want to make sure -- >> if it is done, glenn, does that then -- >> it's necessary but not

sufficient. i am not and never been with binge capital. -- bing capital. -- bain capital. give you a little reflection. i just came back from a week in brazil. very interesting place to be. when i agreed to go to brazil six months ago it would have floored me if you told me the u.s. would have just grown faster, 2.7% than brazil did in the most recent quarter. where now expecting the united states economy to grow roughly 2%, and brazil 1%. you go down there and talk to policymakers and businesspeople about why it is. what happened is they have this great economic miracle going. if he woo add a little more taxes here, a little more regulation there, a little more sort of cost of labor here and a fair amount of more uncertainty about what we are going to do in the future there, and all of a sudden they have taken one of the great economic miracles and taken the steam out of it.

they all understand now this thing that they had, a great economy growing very rapidly, is actually very fragile and requires government to facilitate rather than layer costs and uncertainty on top of it. that's almost like a it's tube for what we are seeing in the united states. we had a time period which we had a huge amount of uncertainty, mostly some revenue, some government action. we have had a very aggressive regulatory agenda which has caused huge amount of uncertainty in energy cost, all those things. we have not made the sort of investments we could have made in infrastructure, education, and research. you add that up and you have a period in which american business is operating under a huge weight. while it continues to innovate and go forward, the conditions under which that could be maximized are ones which government creates the conditions which businesses and scientists can have the intellectual property and

freedom to get their work done. come back to what that means in a minute, but i think that's an important thing to think about. there are things government can do and things government can't do. among the things government can do is create the conditions under which -- as much uncertainty is lifted and cost is lifted in order to allow businesses to innovate. >> if i could follow up because one of the statistics that i had throoked at had to do with reducing regulatory barriers and i thought this was an amazing -- u.s. with less than 20% spends 26% more per employer to comply with regulations. that goes to the heart what we consider the innovation story in this contry. the small start-ups. that's what we are looking for as we look for the next big economic success story are those start ups. those start ups that may have been around for a while. particularly here at google. we look at what -- web presence can do for a start-up as they increase their potential not

only throughout this country but throughout the world. in terms of global exporting. their ideas and their innovations. those regulatory barriers have such a depressing impact on their abilities to get the job done. that is something government can do that doesn't really have any impact in terms of the cost, but can really produce benefits in terms of additional economic -- >> let me fill in the blanks. once we get to this fiscal cliff, there is a very clear innovation agenda that is in front of us. and the condition i think we will have the conditions as a result of the fiscal cliff being behind us and the election turning out the way it did to get at that. the first one i hope will be immigration where we'll create an ability to solve all the whole immigration problem, not just a piece that relates to technology companies, a lot of people say how are we going to compete with china with 1.3 billion people? the answer is we can have the entire world at our disposal by creating conditions that the best people in the wormed can come to the united states and study. >> and stay and start businesses.

>> two, then we have to focus on faction, particularly the corporate tax reform, to get a system which is simpler and promotes efficiency and makes it easier for businesses to compete if the world. third, then we have to -- that will create -- that will be enormous. third, then there is a infrastructure investment that needs to be made. this is very important because in the context of the kiped of budget deal we'll get where we'll spend less going forward as businesses, we have to think about what our values are with respect to what we'll spend money on. the most important things we can spend money on is infrastructure to again create -- make investments in the future rather than just short-term spending. and then twin that with important support for research, basic research, and for higher education as drew talked about. and for education. those -- if government does that, and then create some degree of certainty with

respect to --just tell us what it's going to be we can plan around it, with respect to health care costs and energy costs. and then i think you'll create the conditions under which businesses in the united states will be able to create a kind of a renaissance of american competitiveness. >> i think that's a brilliant agenda. i think we all agree that as that distinguished alumnuffs harvard said 50 years ago, washington is a town imbued with northern charm and southern efficiency. i don't think that has changed. i think, let's assume we go through the fiscal cliff, and i want to ask susan about this first. immigration, corporate tax reform, and investments. immigration, you are not going to do just the dream act, you either do comprehensive immigration or you don't. we have learned, we had a chance to do it, george bush, john mccain, ted ken dirks both wings came and decide they had were going to sabotage it. yeah, maybe the republicans

learned a lesson this time but i am a not sure how much. corporate tax reform, sounds great. i covered the 1985-1986 act. the way that was financed was through the corporate tax increased. they have the most skillful treasury secretary around and people on both sides willing to work with the white house and congress, doesn't exist today. and thirdly, when you talk about infrastructure spending investments and spending things to be done with n.i.h. and national science foundation and the like, all the talk now is about debt. it's not about any -- >> we are going to be going into a conversation on -- >> how do you do what glenn's very am beneficiaries -- ambitious envisions. >> we'll have discussion on the debt ceiling again in january, february? we are not going to get away from the doomsday scenario for quite some time. which would allow us to get to glenn's position. but i do think it is important because the priorities that

glenn outlined are not partisan -- people don't have a disagreement as to whether the federal government should have a role in immigration. we may disagree in terms of where we want to go, but the federal government having a role in infrastructure. there are r&d, larger conversations out there which really do divide the parties in terms of what is government's role and what is not. we all accept these are government roles. the debate gets to which side you take. i think what glenn has talked about is how do you get there? the bottom line is the united states congress and this white house, washington, d.c., is very disjointed because the american public is very dispointed, right? when the american public -- this is a town that's responsive. it's responsive to what their voters tell them. people don't come here and say i disagree totally with my constituencies tell me to do. every once in a while we would

hope when it requires leadership because they get more information than their constituents they rise to that occasion, i do think what is important if we get to that point to glenn's point of these four or five things that need to be done in order to move this country forward, more people need to talk about it. having glenn just even on this panel enunsate those things are very important. i think -- enunciate those things are very important. it allows people both in septemberers of both political parties, wherever -- however many that is these days, to have that conversation and -- it's a lonely center. to be able to have that conversation to enunciate it, posit it out there as something that needs to be talked to and explained in terms of what needs to be done to move -- yes, i don't think it's something that's going to happen tomorrow. can it happen by the end of next year? political parties are scared enough about the -- what's the word i'm trying to think of,

how tumultuous politics is, the pendulum swinging so much more rapidly than when you and i first started in this business of being in politics or covering politics. that i think they will respond more quickly if we can get that message out there. i think it's been so long that we have had this discussion because we talk about debt and deficit, which is very posh, because we talk about how to -- important, because we talk about how to balance the budget. what the government investment and r&d and infrastructure means. i think it is a conversation that has to slowly take place again so that when legislators do step out and make that a priority, they will be applauded by their constituents instead of booed. >> for some understandable reasons the whole dialogue has shifted. there also has been incredibly important efficient government. some of the things that susan just mentioned. remember 20 years ago you were in congress, the n.i.h. was doubled. the budget was doubled over 10 years. i don't know anybody who would argue that was anything but

great investment that helped the american economy not to mention a whole lot of people. that's not part of the dialogue these days. >> in real terms the value of n.i.h. dollar is 19% less than it was 10 years ago. yes, the doubling was critical. we would be in worse shape had it not been on the doubling. cap now urging we try to do n.s.f. and other science agencies and d.o.e., doubling in 10 years or so. which i hope can be done. i think we are drifting below 2.7% on r&d as a proportion of g.d.p. the economists say the best thing is to get around 3%. we are not moving in the right direction. when glenn was talking i was thinking about my own case. the first generation american. my father got here in 1926. partly because he owned a patent. austria. was bought by a company in ohio that later became part of r.c.a. didn't have a fenic to his name as he would have said, but this

little company in ohio paid his boat ticket so he could get here in january, 1926. now, he didn't happen to go into that business, unfortunately for me, he became a psychiatrist. but nonetheless he in his own way he was part of the growth of the great american middle class in the 20th century. this isn't just about rich people. immigration, intellectual property, and creating the conditions, it really does lift all boats. i want to go back for a second. reading a very interesting book, i'm going to do a shout out for somebody else's book, called "iron curtain" and one of the points made in the soastization, the attempted sovietization of central europe, particularly hungary, east germany and poland from 1944 to 1946, they tried to empty out the universities of

historians and philosophers. and they were pretty effective at that. they got them to go west. as we know. or they exiled them in some way internally. in central europe, eastern europe as well. they encouraged more science and engineers, which is fifpblete but they weren't in a creative environment where they could do good work. democracy, as again the founders would have known this, you can't just be a science and engineer in a democracy to look way over the cliff to the mountains and beyond. so i'm very disturbed now to say that one great state university is talking about creating incentives for people to do science and engineering as undergraduates as against in effect creating disincentives for people to do humanities. you have to have people who can look beyond the current crisis. that also has been part of the american middle class, new ideas. >> i agree with that. i would like to see more of an

emphasis on the science and math. i guess -- we are going to in terms of particularly in the k through eighth grade so these younger kids can look up to those role models and say is this something i want to not run from? >> one of the great stories, physics in the 1960's, young physicistsous learning how to do problem sets as graduate students, they started going back to answer the questions of uncertainty and relativity theory, they became more philosophical. this created new opportunity for a whole new area of physicalic in 1970's. if you are just doing problem sets, that's fine, not thinking about the deeper ideas, you are not setting up the framework for thinking intellectually well beyond the cliff to the future. >> is that a question? >> i do have a question, you want to pick up on any of that? >> i would say only one thing.

i fear that we have a burgeoning student loan problem in our country. and if you look it's the only form of consumer debt that has increased substantially during this recession. it is by definition subprime because people do not have jobs. if you actually look at it on an apples to apples basis, because you don't have to pay interest when you are in school. there are a lot of features that are similar to the subprime mortgages and interest only and all these things. very high default rates. i worry about kids who -- i think it's great. i studied the equivalent of social sciences. but i worry about the kids who are get getting art appreciation or literature corresponds in -- courses in universities that don't have the same level of prestige, where they are settled with

huge amount of debt and can't get jobs. and repay the student loans. it's very important if you have a good idea to communicate it. all that kind of thing. social science, humanities are important. we also need to think about people's employibility and not people who went to berkeley and harvard and create conditions under which they can have their personal balance sheets that allow them to prosper in their lives. that piece of it needs to be integrated. >> everybody needs to think and write. that comes in different dimensions and different languages of thought and that's what you get from a liberal arts education. i'm glad they are well represented here with menn and harvard. >> harvard does a fabulous job, but in many cases these private institutions, tuitions that they feel they have to charge,

kid's going to end up with a $100,000 in debt. while public education is cutting back. it is a terrible squeeze. >> it's very important, for instance, some of the work being done -- not just community colleges, but also by extension some of the great universities to integrate in, we talked earlier about the dangers of universities and businesses getting together, benefits but also dangers associated with it. one of the things that we can do that's really important outside of this scientific innovation piece, is create the ability for our schools at all levels to teach kids things that local employers need to have to be employed. then while they are there teach them a little something about shakespeare and the constitution and make them good citizens and engage people. give them skills that allow them to support themselves in the marketplace of the future. >> which is why community colleges have been such an engine for economic growth and

prosperity in america, but we are cutting back on community colleges now. >> one of the mistakes we make, i think, when we talk about the full range of this, which is spending on research and development, supporting universities, all these things, is more money is better. if a businessperson what we think about is like less money is better. the more efficient you allocate your resource, the more you get for your research dollar, the better you be. for instance, today, it is far -- one of the reasons i have so much innovation in this country, it's far cheaper -- all the tools you used are rentable on the web. so we have taken the cost of innovation down enormously. and so rather than -- the ways in which our big through the use of the extension schools and also online education there are important ways which we can substantially reduce the cost and reach many, many more people. and create the opportunity for kids to get the skills, not

just kids -- we think education stops sometimes when you are 20. we also have a huge pool of people of unemployed, 40% of the work force have been unemployed for more than a year now. that's a group that has to be retrained in important ways. so we can use -- we can do that in a much cheaper way in a very different moddle with more connections to industry. the very best universities, not just commune colleges. -- community colleges. >> one of the other statistics i had brought with me was that we spent -- obviously we are spending more money on education. particularly in the primary schools. and yet our science and math have flatlined. we have not seen any increase in terms of -- kids are doing the same they have done since the 1970's. we have not matured. i guess-dirnl' not that familiar with education x. i know google is spending a significant amount of money

studying a.p. science courses and others and stem education to see what we can do better. that's what i'm -- what the big frustration is when we talk about, particularly education, so many of the other social problems that we have just talked about, that when you see there's been such dramatic, technological change and yet we have not really done anything to up end our educational system or look at it and say are there ways we can do things differently, particularly in the prek through the elementary school, so that we can see is there ways we can use these online resources to reach more kids, to get them to think beyond, to do the types of things you are talking about, to introduce them to worlds beyond our borders? i think there are opportunities now with technology to really sort of shake things up. but to cut some of the costs by allowing kids to enter worlds and realms they have never been allowed to enter before through technology.

i think we just need to really sort of spend more time figuring out how we change that paradigm as we know it. as i said particularly for the prek through high school, but even in college. how can we learn better based on what we know today? >> let me try two more before we open you -- open it up to questions. glenn mentioned corporate tax reform earlier. warren buffett says tax rates don't matter as much as a lot of people pretend when it comes to companies and investments and innovation. glenn, i suspect you disagree. it seems odd with the buffet rule which says taxes are important. i make a couple points. one is businesspeople oftentimes say that. tax doesn't matter. tax doesn't matter. you get like one level of underneath that.

you are given a spread sheet, or you are on a board you are given a result, return on investment capital, in the calculation that creates that result is a whole lot of things like taxes and other costs that go in and if you run sensitivities on analysis based upon different kind of costs, different outcomes, so it's not that it's not important. it's not they are not talked about because you are looking at broader conclusions rather than getting into the actual detail. >> to encourage innovation would you want a tax system to look like? >> taxes are embedded in the analysis. people don't recognize that. point two is, we have a corporate tax code, one of the things -- one of the raw opportunities we have here in the budget deal is to get the revenue today and then be able to deal with reform that's revenue neutral tomorrow. that's a real opportunity both for individual and corporate taxes, but no one's talking about getting revenue from corporate taxes. all individual taxes and the

corporate tax is all about competitiveness. we have today the number one -- a whole bunch of features of the corporate tax code which significantly influence corporate behavior. it's not about revenue. it's about a tax system that's been there since 1986 and the result of which every year something has been added. it's like that victorian house that has four different electrical systems that's been added to and no one has taken it out. it's time to do the gut renovation. that just happens. one scompample everybody's talked about is the cash. a lot of this cash is offshore. there's $2 trillion of cash, highest percent of corporate assets in history. what a lot of people -- most of that is sitting off shore because the tax system disinnocent american companies from bringing it back to the united states.

whole bunch of reasons why it is. whole bunch of problems bringing it back. it is an example of a very big outcome difference that's occurred over a significant period of time as a result of the way the tax code is structured. that's not the ideal thing from a theoretical point of view if you want to take the tax back and invest it for research and development, new employees, whatever you might do in the united states. to promote this. one of the things it does, for instance, you see a lot of american companies, particularly technology companies, very cash rich, buying foreign companies because they are using 65 cent dollars to make acquisitions because they can use the offshore cash to buy something off shore. as an example. so it also reduces in some important respects technology companies that have started the day and might want to be acquired by a large company because they get 65 cent dollars to buy things in the united states versus 100% dollars they can use offshore. >> jonathan, one final question then we'll open it up to

everybody. what are a couple things that you would like to see government do? we talked about taxes, education, we talked -- what other areas do you think government could do to better encourage and facilitate innovation? whether it's doing something positively or getting it out of the way? >> i'm not going to talk about spending more money, although of course i would like to see a little more investment than the 1.4% that's in the president's budget for r&d overall. i think it is next year, i wish it was more than that. i don't know how to get more money. leave that to people like glenn and sue. there is one thing that government really can do and that our elected officials and political leaders have not done very well in many cases in the last 10 or 15 years, and that is say good things about science. particularly with the life sciences. we have gotten into a situation in my view in the political discourse in this contry,

unlike 30, 40 years ago, the life science vs. been a cultural flash point. you will not have a great economy in the 21st century and also hurts our national security, thinking about biological, chemical. we got a convergence of chemstrirks biology, engineering, artificial intelligence, fiber, so forth, that requires that we have a strong life sciences base. and there has been some issues in the life sciences, people know what i'm talking about, with respect to stem cell issues and so forth, but i think that has discouraged people in the sciences, even if they don't work in those culturally controversial areas, and a feeling that our leadership is not saying the right thing. it's about the importance of science for the future. >> i absolutely know for a fact there are some young scientists, including places like harvard and penn who made career decision was respect to

certain fields because they feel as though there may not be a future in those fields. >> we have time for a number of questions. somebody have a -- >> i just want to jump in. to what glenn said i do think when we talk about what the government has to do in the upcoming let's say year, two years, i do think obviously getting over the fiscal cliff the deal, getting closer to balancing the budget, which i think is still very important in the mindset of businesses and this government, that we learn to do that. but i do hope because of all the discussion that tax reform is something that is taken seriously for this year. i think it's well overdue. it's been posited as something that should be done now. it's obviously doesn't have time to do it before december 31. i think that there's a real opportunity to make a lot of the changes that we have talked with through -- about through tax reform. and it will give businesses a lot of the assurances they need that the government is paying attention.

>> you should tell barack obama to find a jim baker, then. >> i have an idea for you. which is, this is -- if you think about each time we reached a crisis point of enormous proportions in our country, there's been an institutional response toe it. we had a number financial crises through the late 1800's early 1900's, we create add central bank. and that has proved to be enormously valuable in this past -- for the past five years. for important periods before that. with postworld war ii, we created the bretton wood system of the after 2001 when we had the horrible events of september 11 we created the department of homeland security. i wonder if there is not an institutional -- >> some don't work as well as others. >> i understand. that's right.

it reflects our values and focus of our government. >> it does. >> i'm wondering, we should have a department of homeland prosperity. by which i mean we need -- don't we need someone other than the president who has lots to do who gets up every morning and has a statutory institution -- statutory responsibility to think about american competitiveness. something we have taken for granted for a very long period of time because we were the premiere economy in the world. now we are being challenged and we need to find a way to reinvent ourselves. you travel around the world and they all -- although countries have the highest growth rates have one of those. that's just a thought process. >> we have a bunch of questions there. one there and one there. we have a microphone? the gentleman there in the end. >> hi, my name i'm with owners illustrated magazine. hi a question for the panel and also the president of harvard.

looking at demographic shifts and i'm very excited about this panel because you are talking about innovation, i have a question in regard to the existing application of some of your technologies, innovation, especially when you are talking about people that are already commercializing or utilizing technology to boost their awareness, whether they are musicians, using google, youtube, how do you seal, taking advantage of people that may not -- that currently are not graduating at a high enough rate in our k through 12 but have the engine newt -- ingenuity, personally i covered these kind of people like lil' wayne, uses youtube to get views. or 50 cents or jay z. how do you see find alternative methods through things like fedex to provide access to people who currently are

falling on the wayside but present a tremendous challenge moving forward to america's competitiveness because these are the -- going to become the majority of children coming out of a demographic where outcomes are not to the level of even being able to apply to a harvard currently right now? >> i think -- i can't disagree with your underlying assumption. we have now with the ability to have youtube performers who would never have been able to performers, thinkers, people who want to just provoke discussion would never have had the platform before to influence, and yet now it's there and it's very -- it's not costly and it is sort of the great equalizer for both a musical and ideal perspective. when we talk about -- i think this is something that's going to accelerate as our world gets closer and smaller. i don't have the answers to the

equalization and education, but i do know that somewhere along the line we are going to discover something that allows people -- because in order to influence in a positive direction, or negatively as it may be, but in order to influence you have to have a channel of communication. and we are now at a point where there is a channel of communication to almost everyone in this country, via cell phone, he and an ability to really understand what that can do. i don't know what that answer is. and how you do it. that's why i was saying this conversation that we have in terms of gluing the windows out of communicating the way we thifment how can we use our mobile devices and other things to reach those kids who might not have the structure that we have been thinking about influencing before? so it's -- i guess i could ask the same question. i don't know the answer but i know the technology is there. and somebody who has to really do a little more social side.

discussions. in terms of how to take advantage of it. i do think the future will be pretty -- gives an opportunity for us to really just state that claim to competitiveness again because we are in, i think, this era of equalization. or getting closer to it than we were when i was growing up with regard to an ability to access information but also to get the message that the world is yours. and you can do it. empowerment is what i'm trying to say. >> just on music and technology? we have seen this happen before. bing crosby got to be a crooner because the microphones changed. before that you had to be a high tenor. elvis presley got to make those demos in memphis which he wouldn't have been able to do 10 years before that because now there was magnetic tape. before that you had to go to

fancy, highly capitalized studios in new york or l.a. or chicago. to record. so now the artist you are talking about are able to take advantage to communicate with these new technologies. on the education, can i say, i'm an old-fashioned guy. i still want those kids to come to a seminar on a campus for a while. i do. very much. but i'm also teaching a course next year and i'm trying to figure out how to get my 15-minute chunks looking at a camera and how to integrate that with the courses i teach students at penn. we are early days of this. nobody thinks -- >> a question there. >> carol thompson from strategic consulting. i have a question for each of the three panelists. we have been talking about innovation, education, and we have been talking what we are hoping for the future. i would like to ask you about

the future. what are your greatest fears and your greatest hopes for 2016 and, 2020? it's a small question. >> i'm presume you don't think the world is going to end december 21st. . >> you are in a whole different compass its here, alan. >> what are your greatest -- that's too big a question. >> wow. my greatest fear for 2016 and 2020, i hope my kids are well employed within the next four years. they're doing ok. they're in their 20's. as i said before it's a problematic cohort. so my greatest fear -- i am

unsurrounded by so many incredible kids that i feel good. if i feel bad in the morning i feel good after my class. >> ok. >> how did you know what i was thinking? >> i knew exactly what i was thinking. >> you stole my thunder. by the way, i prefer the thunder to win instead of the heat. i hope we win more championships and the heat does not during the course of that time period. [laughter] >> you know, i think a couple things. one is that i think the fiscal situation is the barrier or the facilitating opportunity between here and there and i really hope that we're on a course in that time period to have our fiscal house in order so that we can have the other things we need to do to create prosperity. at that -- if we haven't gone it done by 16 to 20 we are going to look like europe. we're running out of fiscal capacity and we're worse off.

that's my greatest both fear and hope. -- being in the technology world you get to see the future and you spend your life thinking about the future. so principles in the labs in the companies i visited today are products around services that are being developed to be introduced in the future. you're not thinking about -- you know, if you're an aluminum, you think about building aluminum. we think about the future all the time and understand it's a messy complicated but kind of fun process getting there. on the other hand, i went to a thing at the world economic forum about three, four years ago and had all the c.e.o.'s of major technology companies gather in a room and they were all talking about what they saw in the future and they were all -- every one of them was interested in second life which

no one of us remember and no one mentioned facebook. and so you can see where the technology can take you in the future but you can't predict it. >> that's true. >> form it's going to take. and i hope enormously that's what happens. which is something some innovation that we don't expect and some innovator hopefully kind of a young lady who's trained in one of the great science crick lums in the united states kind of creates something we -- with the technology we know today but in a way we don't expect. >> susan, why don't you close it out for us? >> so let's put aside all the other things that need to be said, iran, north korea, let's put that aside. let me just bring it down to something that i think we talked a little bit about today and is a little more relevant to today's discussion taking

off the table. what does keep me up in 2016 and is the fact that i have seen through my lifetime women change -- the face of women in society in business change, right? we are now at a point where women are the majority of graduates in colleges, women are heading prestigious universities where 25 years ago they weren't allowed to get in. we are looking at a fairly even supreme court. we are looking at medical schools that allow women to get to where they need to be. and i was kind of joking when i said that i thought the united states congress was male dominated and then i went into tech but i really wasn't. i see this still issue that we have with young girls in math and science and broe jecting it out to 2016 and -- projecting it out to 2016 and 2020 and for all the advancements in becoming equals if not surpassing in certain areas that when we get to a place

where technology rules and in so many ways in 2016 and 2020 technology will rule, it rules campaigns, it rules the airwaves, it will rule education. this is the world in which we live that, you know, that we're going to be living with another glass ceiling that our daughters have to break through and that kind of makes me sad for my girls and for their friends so -- >> we hope we break through it. >> ending that on a positive note. that being said, this day today -- this day today was brought to you by mira, susan and the president of harvard, all females. and we all know, al -- >> my wife, kept my maiden name. i want to thank all of you. this has been terrific. everyone's been interesting, fun and formative and we also get to serve as advanced people for james which is always a

great, great thrill. thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> the u.s. house is in session. right now they're recess subject to the call of the chair. we expect lawmakers to return at 5:00 eastern on a compromise defense authorization bill. setting pentagon programs and policy for the next year. votes will be postponed until 6:30 eastern. you can see the house live when they return here on c-span. in the meantime while fiscal cliff negotiations continue, we hosted a roundtable discussion about the debt talks and domestic program cuts on this morning's "washington journal." can host: isabel sawhim and james

capretta. mr. capretta, let me begin with you. are these sequester cuts devastating? guest: they would be deep cuts. 80% cut across the board is a very significant one-time cut for any program to sustain in the immediate year period. so they're not a good idea. would it be the end of the world? no. host: what do you mean by that? guest: there would be a downsizing of a lot of services across the government in terms of domestic accounts. so there would be fewer services being provided. there would be reduce in federal employees. some grant programs would take a haircut of 5%, 10%. so there would be some downsizing of the services that are provided by the federal government. but the economy would go on and the government would go on and the public would still continue to get by and large serviced.

host: can agencies manage this? have they in the past? guest: we've managed squesters in the past. not of this size. this would be a pretty big -- this would be the biggest one to my knowledge across the board cut. i am against just allowing the sequester to occur. i think we should be targeted cuts in programs in a are actually rational and thought through. host: there should be spending cuts. thought out ones? guest: absolutely. host: isabel sawhill, if sequester happens, do you agree? guest: i agree. it is about an 8% cut and that's pretty deep. that's serious stuff and it's done in a bad way across the board as he said and not picking better programs versus the worst ones and choosing wisely. the other thing i would add is it's on top of some cuts that we already enacted. i think a lot of people don't understand that as part of the

budget control act, a law that was passed in 2011 as part of the debt ceiling crisis of that year, we already cut spending across the board, discretionary spending across the board by 7% or so. so when you layer these new cuts on top of the ones that have already been enacted, the total cut is more like 15%. and that gets to be quite devastating. host: jim said, though, these are manageable. the economy goes on. agencies figure it out. do you agree? guest: well, look, it's -- is it half empty or half full? you know, it's not like 9/11. it's not even like hurricane sandy. it's not like iran getting nuclear weapons. but it's very serious stuff. and the worse thing about it is that it's so indiscriminate. it's so poorly done. it was never intended to be a way to cut spending. it was intended to be an

enforcement mechanism, a disciplinary measure on the congress and white house to make sure they got something done before 2013 began. and everybody thought, well, with this dooms day scenario in front of them they will surely enact a budget deal. i think they probably still will, but that was its purpose. its purpose was not just to cut government spending. host: let's take a look at some of the examples of programs that would get cut. guest: those are pretty big numbers. i think, you know, absolute numbers don't mean a lot to people. you know, when we talk about millions and billions, jim and i both served in government and we know what happens when you have to deal with numbers of

that size. so i think telling people it's about an 8% cut or 15%, if you talk about what's already occurred, gives them a better sense. it's going to be on everything. so whatever program it is, it's going to be reduced. so whether it's money for the n.i.h., as you said, which does research on cancer and alzheimer's and diabetes and other chronic diseases, they are going to be doing less research. if it's the f.b.i. or the border control people, there's going to be less law enforcement. there's going to be less money for housing assistance and for childcare and for slots in head start. it's going to be fewer teachers. a whole lot of thing will happen or will happen. host: should there be any further cuts to domestic spending? guest: absolutely. i believe we have to have -- we have enormous deficits going

forward. what we need is a balance of revenue cuts and ref -- spending cuts and revenue increases. given we already had spending cuts, i agree with the administration's focus on now let's do something on the revenue side. but going forward, the big items in the budget are not these little programs that are threatened right now. they're the big programs like medicare and social security. host: but ticking to domestic spending, should there be any cuts to domestic spending? guest: i never say there should be any more cuts. they should be very carefully chosen. i think this particular part of the budget, which is only about 18% of the total, has already taken a very big hit. and it's the part of the budget where we invest in research, where we invest in education, where we invest in infrastructure. so i don't think that's the

best place to cut. host: i'll get to jim in just a second. let's stay with these spending cuts. education. what will be the impact of sequester on education, do you think? guest: well, most education spending, of course, is paid for by state and local governments. but the part that's paid for by the federal government would be hit very hard. so there would be the need because of less grants and aid from the federal government to the states there would be less money for teachers and especially schools serving less advantaged students. there would be less money for special education, for kids with and handicaps or disabilities. there would be less money for a variety of things of that sort. host: jim, i know you think the cuts are too deep, but where can you cut when it comes to education? guest: i'm not sure i would use the word too deep. i think they're indiscriminate.

we need to restrain spending. there's a lot of room to cut this portion of the budget. it's true a relatively modest cut already. that was off a high base. there has been a large runup in this part of the budget between 2000 and 2002, the increase has gone to 40%. there's been a steady, steady rise. that's been education, health care, infrastructure. across the board these programs have all been elevated in their size so there's room to retrench a little bit without doing much damage. so for instance in the education space, the programs are you a basically federal programs to addition what state and local governments do. there's no evidence that much of the spending has had any positive impact on educational achievement at the state and local level. so we've been doing this now for 30, 40 years. lots of studies have shown that

the federal money has largely irrelevant in terms of educational achievement. it's also a very small portion of the total education budget. and it's been increased substantially at the federal level. confusing political accountability, education is incredibly an important issue but it has to be handled at the state and local level. if the federal government pulls back somewhat on its funding, it actually could aid the school systems at the state and local level if there is much more political accountability where they have to decide how much they're going to invest in their schools. host: let me move on to public safety, jim capretta, how much can be cut there? guest: public safety is an important role. we have things like border control and the f.b.i. and the administration of justice at the department of justice. again, most crime fighting is done at the state and local level, not at the federal level. however, i don't think there's that much room for cutting in that portion of the budget. i think they're probably like anything else some room for

consolidation, some overhead removal. if i were to cut in this area of the budget i would be focusing on things like reducing the size of the work force. i'd be looking at consolidating programs that are duplicative. g.a.o. has done a number of studies across a number of areas including the administration of justice. i'd look at low-performing programs. there have been a number of evaluation of programs that say, are they actually achieving the results they're intended to to achieve? and many studies have been done showing that some programs actually don't do anything in terms of delivering public services. so i think those are the areas i'd focus the attention on. and there's some deep cuts that could be atcheefed there. host: senator coburn had a report that he sponsored. it was written up in the papers last week about homeland security grants that has really ballooned since the 9/11 attacks. and you're looking at cities that have made up implausible scenarios for terrorist attacks. room to cut? guest: i think so.

yeah. i'm not an expert in the homeland security area, but i'm familiar with the general point, and i i agree that when the federal government starts giving out grants like this there's lots of room for abuse and madeup roles and madeup responsibilities to try to get federal money. i think that's probably taken the place to some extent and i'd take a hard look at cutting it out. host: isabel sawhill, your thoughts. guest: no one can disagree with the thought that we need to make sure that the federal government has well-performing programs. i would give the current administration pretty high marks on worrying about that. they have a whole program in place to evaluate programs and where the evidence suggests they're not working, they are trying to cut back or else reform the programs. let me give you an example. the head start program, very popular program that uses federal money to serve 3 and 4-year-old kids from poor

families and help them get ready for school. and early childhood education of that sort has long been a fairly effective way to help kids succeed. however, the current head start program is not always operating up to snuff. in fact, there's some evaluations that show that there are enough head start centers that are not doing well, that they really need to be closed down or the money needs to be recompeted. well, the administration is doing that now. so i think what jim and i are both saying is it's the indiscriminate nature of these cuts that's wrong. i may disagree with him a little bit on this notion that we're spending too much money on this part of the federal government. if you look at the proportion of money that we're devoting to these programs as a portion of g.d.p., the size of economy,

taken population growth in the last 30, 40 years, then they're headed to their lowest level on record. and i think this is not the way you grow a strong nation is by cutting education and research and infrastructure and these kinds of programs. host: so we're talking about domestic spending cuts, what can be on the table if sequestration happens. the two sides are trying to come to some sort of deal. but any deal will contain cuts to domestic spending as well. so new orleans, as we talked about here, education, public safety, public well fair is on the table. possibly health care. federal government research, parks,est. independent caller. what do you want to say, george? go ahead. caller: i have a two-part question. number one, would you explain to an illit rate individual like miving what baseline budgeting is, define it, and then -- myself, what baseline

budgeting is, define it, and then how can 1%, 2%, 3%, 4% money available to a department be considered a cut? thank you. host: ok. jim. guest: baseline budgeting means the congressional budget office, the office of management and budget, the agencies that calculate the budget projections, they do an estimate of what the budget looks like next year and they assume current law for programs that are already automatically grown, social security and medicare, and domestic accounts, what we're talking about this morning, that they'll grow with inflation. so they assume an automatic increase of roughly of 2% to 3% is going to occur to keep these programs in line with inflation. then they measure a cut against that inflated baseline. so they'll say if you cut below that level then you're making a real cut in the program. so for instance, if a program was going to grow under the

baseline by 3% and instead it grows by only 2% that's considered a cut. i know for a lot of americans they'll say, wait a second, it still grew by 2%. in the way washington views things, it's called a cut. guest: i think that's true. between 1989 and 2008, the cut was about 3.6% on average over that two-decade period. we had a major runup, partly through the stimulus, partly through large increases in spending that occurred in 2009 and 2010. president obama came into office, he increased this portion of the budget very substantially. 24% over two-year period. so there's been a very major runup in these programs. you can do some retrenchment

back to the 2008 levels without doing damage whatsoever. host: isabel sawhill. guest: on this last point. the runup that jim alluded to was due to the recovery act. because we were in a recession and we enacted a stimulus plan. some of these programs were bumped up. but that's search rather. and most of that will go away partly because the recovery act is going to expire and partly because, as i said earlier, we've already had some cuts where i take the form of putting hard caps on how much congress can appropriate for this part of the budget. and those hard caps are going to bite over the next decade. those are things that have already been enacted. so i agree with the caller who said we've done a lot of cutting in this part of the budget already. that doesn't mean we don't need spending cuts elsewhere. but i think this is the wrong place to do them. host: isabel sawhill, right wing on twitter says this --

the democrats won't cut the part that needs cutting. guest: well, there's some truth to that because as i said before, the drivers of our deficit in the future are social security, medicare, medicaid. these are, say, 40% of the budget or more right now. and growing very, very rapidly. partly because the elderly population is growing and partly because health care costs per person are going up very rapidly. so if the public wants less medicare, less social security, less medicaid, which pays for nursing home care, as well as for health care for low-income families, fine. but -- and we're going to need to go there. but we cannot continue to squeeze money out of this small part of the budget that's called domestic discretionary programs. host: and what we're talking about, safety net programs, which makes up about 13% over

the overall budget. and then the other portion of that pie is 7% of that portion is benefits for federal retirees and veterans. 3% for transportation and infrastructure. 2% for education. 2% for science and medical research. and 1% for nonsecurity international. i guess that means foreign aid. raymond, cleo, michigan, democratic caller. go ahead. caller: yes, i have a two-part question. i was wondering for one, i'm going to be retiring here in another 12 years, but i'm not going to have social security until probably the age of 70. i'm 50 now. i was wondering, right now if i was to lose my job for some unforeseen reason, i will lose my benefits. i have the option as an employee to keep my benefits at about an $800 cost.

but when senators and the congressmen step out of their position, i'm not mistaking, they still have their insurance for life. and in the second part question that i'm posing is, i believe they're going to get a 3% pay raise every year. i've never seen in my lifetime them stop that. i was wondering if that's something that could possibly be done? host: isabel sawhill. guest: i assume what you were talking about, if you lose your job you would lose your benefits, you mean primarily your health care benefits. you're right. you would lose them. under the affordable care act, once it's implemented in 2014, that would enable you to go on an exchange and buy a group plan. and if your income was low you would also get a subsidy from the government to buy that up to fairly -- up to a moderate income level. on the point about pay raises, you may be interested to know

that there's actually been a bill introduced in the congress that says no budget, no pay. in other words, it says in congress can't get -- if congress can't get its act together and can't fix this budget problem it -- they don't get paid. that bill has not been enacted but there's a group in congress that's been willing to put that legislation forward in response to yours and many others' comments. host: here's a tweet for you. guest: we need to restrain spending at the federal level. there was an interesting study very recently that showed if you look at the productivity of the federal work force, like i've been a federal worker much of my career. i'm very -- i admire the federal work force. there's many things being done very well.

we need to get more out of the work force as well as the private sector. as far as of making the federal work force more efficient, they need to downsize the federal work force. that doesn't mean it's going to be bad. it means it will free up the other sector to occupy. host: brenda, fort worth, texas, independent caller. caller: i had a couple of statements. regarding the congress expenditures on themselves and their money, "money magazine" in the 1990's did an article about that where they had at that time went from less than $1 billion to operating on $2 billion or $3 billion and they found four people that worked for one congressman and all they did was work to get him re-elected and other uses of

our taxpayer dollars, which it wasn't meant for. along with that, which is what i was calling about, social security federal employees get bonuses. and this has been going on for 40 years i know. and i don't understand if they're getting a salary, an hourly salary and so forth, why should they get bonuses? host: isabel sawhill. guest: well, i think that bonuses are not such a bad idea. the private sector uses bonuses to give the private sector people to have them perform better. you get a bonus if you've done something to improve service or been a very hiley productive -- highly productive employee. i think by the way it's worth pointing out that the social security administrative systems would be affected by this sequester. not the benefits. not the check that goes out to

retired citizens, but the administrative expenses in the social security system which by the way are quite low considering the big job they have, but there would be slower processing of initial applications. there would be slower processing of claims for disability insurance. i think we would not be well advised to not give incentives to federal workers doing those kinds of jobs to be the best that they can be. host: republican caller. caller: this is smitty from farmington, new mexico. what a wonderful time to get in. ms. sawhill, you are so outdated it's incredible. if anybody wants to know how much money we waste, we just recently had a guy up in the northwest that won a lottery, took home $800,000 cash, and went down to his local -- his local food stamp office, told

them that he won the money and they said he still qualified for food stamps. these people are nuts. the federal government probably has a minimum, a very minimum, and i worked for government and i worked in the utility industry which is almost the same as working for government, at least 40% overpaid, at least too many people working. at least 40% working than they need to do the job. when they say they're cutting the government, they're not cutting a darn thing. congress doesn't vote for raises any more. they get automatic raises unless people have the gonads and say they don't need a raise this year. i don't think they've done it since they put that into effect. they don't vote on raises any more. host: sorry, i don't agree with all of -- guest: sorey i don't agree with all of your facts there. one can find instances of

fraud, waste in the federal government as one can any kind of organization. and so i'm going to once again say we need to do a better job. there's a lot of money being allocated down to what's called program integrity. meaning let's make sure that the money was spent for what it was intended for and not misused in any way. let's crack down on fraud where it exists because there will be citizens that try to gain the system and sometimes they'll succeed. but that doesn't mean that i think the entire system is there for -- therefore bad and should be slashed and cut way, way back. host: on our line for democrats, doug, nicholsville, virginia. caller: how you doing this morning? host: good morning. caller: appreciate you taking my call. i don't see why, like the highway department, can add a

few more cents tax to the price of fuel and make jobs with that. just run the whole department on what they can collect. host: jim. guest: well, there have been proposals over the years to raise the gas tax which i think is what the caller is talking about to pay for the highway program and that is not a very popular provision, throw. i mean, one of the most sensitive items in the economy is the price of gas and so there's a lot of voters who watch that at the pump every day. you know, every week when they go fought pump. so it's not a very popular item for a politician to propose to raise the gas tax to fund the highway system. i would say we need to move toward a system where we get toward energy independence and there's lots of efforts under way, including by this administration, and ideas that were talked on the campaign to do that. i'm generally supportive of

moving on all fronts on that idea. i think that's where we need to go. host: speaking of the administration, i want to show what the viewers what the administration and what the republicans are trying to do to avoid the squest operation. the white house says a one-year deferral of sequestration, and multiyear stimulus package. i think the figure is at $50 billion. jim capretta, is in a a good idea? host: i'm for -- guest: i'm for them working on a multiyear budget framework. how that's done is a larger debate. we need to talk -- the big issue in the federal budget is entitlement spending. that's where the action is. that's where the money is. that's where the problem is. it's true that this portion of the budget can take some cuts. we should do it in a careful way. we shouldn't do it in an indiscriminate sequester. i agree with that. the budget framework, we should take on the growing cost of medicare and medicaid and social security.

those are the drivers of the deficit. if we can as part of avoiding the fiscal cliff put in place a framework where that is dealt with seriously, i'd be all for it. host: what about adding more stimulus money? guest: i don't think the previous stimulus was well depon. i think the previous stimulus frankly was too heavy on government spending and not enough on reducing the tax take of the federal government, putting the money in the actual households. i'm for allowing the payroll tax reduction that occurred in 2011 and 2012, i'm for continuing that. i think that would put money directly in the pockets of working families. i think that actually could help the economy. i'm very dubious however that more spending through stimulus-type measures that were enacted in 2009 will do much good. i don't think they did very much good the last time around. host: isabel sawhill, your take? guest: i think a one-year

deferral would be ok. if the rest of the package looked good. i think on the stimulus idea, the $50 billion you mentioned, this is a great idea. and the reason is because we still have an unemployment rate at 7.7%, which is very, very high by historical standards. this recovery is very fragile. if we start raising revenues and cut really spending right now in a major way and do it in 2013 as opposed to doing it but doing it more gradually and giving the economy a chance to recover, that's not going to be good. and i mean i really think we have to remember that it's not just our debt and deficits that we need to worry about, it's the economy. and if you want to create jobs, then you don't want a ratchet back on what the government is doing in the short run. you want to do it in the longer run. you want to talk about the

entitlements that jim was talking about. that doesn't mean you do something big in 2013. host: to avoid sequestration, the speaker has put forth a plan to his proposal includes $300 billion in mandatory savings, $300 billion in discretionary savings. do you agree, disagree? guest: i think that the big issue is the overall balance of the package, not a specific number for any one piece of it. so i think that if republicans agree to something similar to what the president's asked for on the revenue front which is $1.6 trillion in new revenues over the next decade, then democrats will be willing to go along with spending cuts and the president's already put $350 billion at least of spending cuts on the table. host: in medicare. guest: yes. so i think it's got to be a package though.

host: ok. all right. jim capretta, what do you think of the house republican proposal? guest: well, i think they should be even more aggressive on the entitlement reform side. i think probably because of the election they are not asking as much as maybe i think they should. the real problem really is the operations of medicare and medicaid. those programs have big problems associated with excessive cost growth related to the waste that occurs in medical delivery generally. and the programs need an injection of what i call competition in the program, a consumer-based system where the consumers have to select based on price sensitivity. that's a key ingredient of getting control over these entitlement programs. >> we'll leave this discussion at this point. you can see it in its entirety on our website. impto c-span.org. live now to the american enterprise institute here in washington. they're about to host a

discussion focusing on the republican party and the 113th congress. we'll hear from congressman jim jordan who is the current chair of the republican study committee, along with incoming chair, congressman steve scalise. this is live coverage here on c-span. >> we're privileged to host this event to welcome the incoming chairman and to thank the outgoing chairman for their service. this is a very special friendship between a.e.i. and the republican study committee, r.s.c., that we've cultivated, something that's been very rewarding for us over the past couple of years. you have the outgoing and incoming leaders for any organization, but the nature of the r.s.c. and the nature of these leaders actually makes it more likely than what we'd see with most organizations. the republican study committee is not the majority in congress, but they're the majority of the majority. they are the majority of republicans that are currently in control of the congress, and many of you, i imagine, hope

will be in control for many years. the republican study committee, this is language that comes from the charter. and i'll read it to you because i think it speaks volumes what these gentlemen are trying to achieve. it was to serve as an ideological rallying point where like minded conservatives can coordinate their activities and stan on the base of principle where a minority of committed men and women without years of seniority or formal leadership position can affect change. they can do it on their first day in congress. they can do it by coming up with a sound policy idea and by articulating a powerful position in the debate. as i said, it's a friendship that we have cultivated for years, especially with the executive director paul teller, great friend to many of the scholars here at a.e.i. and former a.e.i. intern many years ago. the current chairman of the republican study committee is jim jordan, here on the right. his term as chairman ends at the end of this congress in a few weeks. as many of you know, jim

represents ohio's fourth congressional district and he's through his last three terms served in the u.s. house and has quickly become very influential as a republican member standing for absolute principle. principles of limited government that is constitutionally limited for a strong national defense. fighting against tax hikes and allowing families to keep more of what they earn. simple principles but principles nonetheless that behooves a lot of us to remember, i dare say. the incoming chairman is congressman steve scalise, right here to my right. he will be the chairman during the 113th congress. he represents louisiana's first congressional district and was first elected in 2008, one term before the wave election of 2010. he's known as a staunch conservative, as is fitting for the head of the r.s.c., and he advocates for the principles of limited government, just as did jim, just as all the heads of the r.s.c. american greatness. the idea of limited government

and traditional family values. he's is a vocal member of the house energy and commerce committee. and he's established himself as a go-to guy in effectively articulating conservative views to national energy policy, something that might come up in our discussion here today. so i'm delighted to have both of them today. congratulations on a successful term, jim and congratulations, steve. [applause] we have a few minutes to ask a few questions. get some thoughts from jim and steve about how they see the issues ahead of us today and past couple of years. maybe i can start with jim. you and i have gotten to know each other in the past couple of years and i've enjoyed that. we've seen a lot of stuff going on. not much wheeling and dealing as you've seen in congress. i'm sure you have the scars to show for it. as head of r.s.c. and after these past tumultuous years,

what do you think you've learned? >> thank you for having us and the great work that you and your organization do. and last two books have been tremendous. i know many r.s.c. members have enjoyed the info and the thoughts in there. thank you for that. i actually used the second one, "the road to freedom" read part of that. had to give a presentation in church. you were quoted from the pulpit in my church. that's not every day you can say that. put that on your resume. >> no souls were saved sunday. >> so we appreciate the close relationship that we've had with your fine organization. the highlight i think was frankly when i would argue when our republican conference was most united was probably in the summer of -- was during the biggest fight we had this congress. although we're in a pretty important debate right now. but probably the biggest fight was in the summer of 2011 when we had the debt ceiling debate. as you may remember some of you, we were putting forward

this concept that we actually viewed as a solution, not just another deal in congress, but a solution to our spending and debt and growth concerns that we have in our economy. the solution we called cut, cam and balance. and -- cap and balance. it united our conference. it was something the american people embraced. unfortunately harry reid didn't embrace it and tabled it in the united states senate and then we moved on from there. i argue it was a highlight. we needed to cap spending. we needed to cut spending in the first year. cap it. start the process that everybody else has to function in, a balanced budget requirement added to the constitution. it would help address our fiscal concerns but more importantly be one of those that would help us get to economic growth. i'll be -- the one thing we need. george will spoke to a group of us. he had a great line. r.s.c. meeting. steve and i were there. when you have 1% growth it

feels 1% economic growth it feels like a zero sum game. when you have 5% growth it's boundless opportunity. and that's what we got to get back to this message of what can we do to give opportunity to american families, to american young people, to americans in general. and cut, cap and balance was part of it. getting back to the kind of policies to promote economic growth. and that optimism and that specialness that reagan talked about that is i think where we need to be as a party, where we need to be as conservatives. >> the -- if you have a particular disappointment over the past couple years besides the november plerks, what would it be? -- election, what would it be? >> the fact that we didn't pass that. let's be honest, the decisions that were made in the summer of 2011 put us in the mess we're in today. if we could have held strong and got something -- an actual solution, something that would help solve our fiscal problem and promote economic growth we

wouldn't be where we're at today. we're getting ready to raise the debt ceiling again and we have yet to make one dime of the promised cuts in the last debt ceiling agreement. so that's probably our biggest disappointment when i look back on it. frankly, if we had a -- if we got a better outcome in that debate, in that fight, it might have had an impact on who actually won this past election. so it's just like we fell our kids all the time. you make decisions, they have implications and consequences in the future. we had a decision then to go along with that deal that i thought was a bad policy and we're in the situation we are in today. that would be the biggest. the same thing is when we most united and did things that republicans and conservatives we stand for and that same situation where we didn't get it done is probably our biggest regret as well. >> all right. steve, you're taking over a great organization, one that's gone from the past 15 years, something from 17 members to

170 members. a 10-fold increase. an extraordinary expansion because of good leadership and also because this is in the zieguist. what will we see you build on and what are your biggest priorities? >> want to thank you, arthur, for the leadership. you've spoken to r.s.c. a number of times. it's great to hear the moral case for economic greemed and the for instance we believe -- freedom and the principles we believe in. we have an opportunity to bring people to our side because i think they want for there. we have to lay it out in a much better way. i think, too, and i want to commend jim jordan for a great two-year term. i mean it's been -- he's got the scars to prove that he's been a great chairman. i just want to congratulate him on the job he's given in service to all of us. i'm looking forward to see him as a member of r.s.c.

if you look at where we are and where we need to go in this next congress, we have great challenges ahead. we know what we're facing in terms of what this president wants to do. what this president wants to do not only in terms of spending but in terms of radical policy and in terms of attacking i think a lot of the very basic principles that we believe in to secure the american dream. if you look at how we can achieve the things we need to do as conservatives, i think we need to first recognize that barack obama talked a lot about a mandate that he had. he did not run on a very broad agenda in this last election cycle. the leaned was, ok, things might be bad but -- the agenda was, ok, things might be bad but will be worse under mitt romney and we need to continue because things will be better. that was the bulk of what his message was. we in the house, we ran on a real conservative agenda. not only a visionary agenda, what we need to do, we took the hits for the votes that we

took. we took some really important votes. we passed a budget out of the house. the senate hasn't passed a budget in three years. we passed a budget that starts to tackle the entitlements that we know will go bankrupt. we passed some reforms that will get us to a balanced budget. we brought up cut, cap and balance and passed that out of the house. we put things on the table. we put jobs bills in a had bipartisan votes. we passed a bill just a few months ago that prevents are the fiscal cliff by saying nobody's taxes will be increased. all of those votes we were criticized for. they called us right-wing naughts. we explained to the people of the country what we want to do to number one get our economy going on and get our economy going again. we were re-elected with a mandate, not only to be in charge of the house, but to be a line of defense against a

radical administration. i think we know what our task is. if you look at r.s.c. strength, and i don't think it's ever been stronger in terms of numbers and resolve. that will be our challenge because we will be tested. because you have so many members that are coming back that have been through this fight, that have been afact for the things we fought for in the last congress, but also the candidates that got elected, over 30 candidates, all but four, paul teller tells me, all four have expressed an interest in joining r.s.c. so you got a lot of people that ran in a tough environment and got elected talking about these conservative principles that we believe in and the economic fwreemeds that we -- freedoms. i know it's going to be a tough road ahead. we wouldn't be doing this job if it was an easy job. we are looking forward with a mandate that the people sent us here to go do. >> something that's on all of our minds here, the fiscal cliff. and i would be remiss if i didn't ask you both to weigh in

on it. but in the following way, number one, what's going on that we don't understand? number two, what should happen? number three, what's the r.s.c. going to do to help us get to that better state of what should happen? either one of you wants to chime in on that one? >> first of all, you know, if you look at where we are right now, it's because of a number of reasons. jim touched on a few of them, going back to the debt ceiling deal. i did not vote for the budget control act. to me it didn't address the real problem and that's spending. if you look at the debate right now, it's mostly about the debate of how much faxes we need to raise. the president keeps adding more to it because he has an insatiablet appetite to add more. we are not addressing the real problem. i don't think anybody's taxes need to go up. you look at what barack obama said three years ago.

if you raise taxes in a bad economy it will make things worse. we're still in a bad economy. why would we want to do things that makes it worse? we ought to be focusing on the real problem, prevent faxes going up. and then brings up the jobs bills that we fought for to get people working again. that was the biggest issue that came out of this election and president obama is not talking about jobs right now and he's not talking about how to control spending. he won't put a spending cut on the fable. all he wants is an unlimited debt ceiling increase so he can continue going forward. i think you're going to see r.s.c. members continue to fight for those principles because we know that's what's going to ultimately work to solve these problems. >> look, tax increases won't promote growth. you shouldn't do it. that's the wrong policy. i guess one of the things i'm also disappointed, our conference doesn't have a tax reform. r.s.c. put one forward. went to two rates. went to simpler system. you need that inspiring, you

can take to the american people, this will help every single family. we don't have that message right now. that's what we need to focus on. we shouldn't raise taxes. i am not going to do that. it doesn't help growth. we need that plan that inspires. everyone understands the tax code is broken. i do this every year. how many do you think the tax code is broken? every hand is up. some of you are like me, they don't raise their head but nod their head. approximately half the population you don't have to participate in the main tax is broken. any tax cut on the corporate side which says to american companies we're going to charge you the highest corporate rate in the world is stupid. so if it's broken and stupid, you might want to start over. so that -- we need that message, too, going forward. here's what we're for, here's how it helps your family? this is exactly what arthur writes about. here's what it will help you

personally, more opportunity for your kids out of college, it's got to connect personally with families across this country. i think that's real important. people say, well, the republican party after this loss needs to change this and this. we have the right principles. we need to present them better the way arthur writes and talks about. i think you have to orient it toward a family. i never intended to get into politics. i was joe bag a doughnuts wrestling coach. i was going to coach wrestling forever. you get marriage and got kids. said i'm sick of government faking all of my money. i said i'm going to run for office. i care about that. it starts with the tax code and a whole host of other things but it's got to connect in that way. that's why steve understands it. that's why he's going to be a great chairman. that's what arthur understands. that's why this organization works. >> thanks for that. steve, you mentioned something

about the debt ceiling. that's an esoteric topic for a lot of americans. the president of the united states has proposed, as many of you know, to have -- at his discretion be able to raise the debt ceiling for the united states in an unlimited way forever without the approval of congress. so what? what's the big deal, steve? >> i think it's primarily the most frightening proposals that's come out of this town, and there have been a lot of frightening proposals. if you look at where we are in terms of our national debt and when you add on the entitlements that are unfunded, the president i don't think has acknowledged and maybe he just doesn't recognize that one of the greatest threats to not only economic freedom but to the american dream for my children, like jim's children, i have a 5-year-old and a 3-year-old. i think most people that have young kids recognize the ability for our children to

have the same opportunity that we enjoy today is at risk because of spending. period. the biggest threat. and yet the president will not lay a single cut on the table. and then he comes out with this ludicrous proposal to have literally unlimited increases in the debt ceiling so he continues to rack up debt to historic levels that exceeds what he's already done. >> i'm sure you're both aware that the research our economists have done on how to solve a fiscal crisis, like the one we're grappling with, and some of you in the audience may not know that a.e.i. economists looked at 21 countries over the past 35 years that were in precisely in the same situation we are in the united states and one of the things we find very clearly that countries that try to solve fiscal crises on the basis of revenue increases through taxes tend to fail. and those that succeed rely at least 85% on average on

spending cuts. so this obviously bolsters the argument that you two have. this is the impurecal proof that this is the right approach. what you see is an endorsement of the president's policies as ratified in the last election. here's a slightly more philosophical question for you both. we have around here said for a long time, and i know you've agreed with this, that this is fundamentally a country that's center right. it's basically a conservative nation. certainly your districts are. the reason you ran is because you wanted your values to be represented. because these are main street american values. what does it say that this election went the way it did particularly because we were talking about how to solve our fiscal problems, whether or not our problems were those of overspending or rather those of undertaxing, what does it say to the american people and how public opinion is changing?

>> one thing to add to steve's comment. the biggest deal is the constitution. we're the body that's supposed to deal with spending issues and sometimes the president wants to forget about that and unilaterally borrow and spend and spend and spend. you see the graph and where the dots are. very good work. >> our chief economist. >> so remember -- >> aei.org. >> remember elections are still about candidates. so i don't know you can extrapolate and say there is a -- you got two people running for office. this situation being incumbent one and our guy lost. i wished our guy would have won. i thought it was going to be close. so there's that dynamic. there's a host of concerns, like i assume many of you have, explanations, information, data on why it happened, how it happened. there's a host of things. i do think what i said earlier, we have to make sure we're

presenting what we any is best for the country in a way that connects with american families. and when we do that we win. and our party historically is about four key issues. lower taxes, less spending, strong national defense and defending traditional american values. when we have a candidate who can present that in an articulate and compelling way we win. when we have members of congress, and of course the big debate on capitol hill, who can present those things in an articulate and compelling way, we win. when we have the courage to stick to it. so i don't think things have changed. oh, the republicans have to do this. it's always msnbc giving republicans a way to behave. ok. we'll take it for what it's worth. when we stick to our principles and have the right tone and the right passion and the right -- the right way, we win. and so i think we're at -- i think we're at one of those important moments for the

conservative movement where we have to recognize what we believe in is right. the principle is the truth. and we have to be willing to make the case and do the extra work and make sure we can prevail and win. >> steve. >> well, you know, one thing that the president did throughout the course of this entire campaign, it was a very populous and divisive campaign. but it shows you if populism and division go unchecked that there are people that will buy into that argument if they're not shown the other side of it. i think not a good enough job was done at not only defending free markets and conservative beliefs but getting into this question of tax fairness and the concept of sticking it to the other guy when the other guy is behind the tree, as long as it's not me the guy making the dollar more than me should get taxed higher. instead of not being ashamed of wealth, our country, one of the great things of our country is it encourages people to come and sacrifice everything from nothing to achieve wealth and

anybody can achieve that. you go look at the people that dropped out of harvard and are billionaires today because of this great system of ours. by the way, don't forget about the millions of great jobs that they created along the way, too. it wasn't just about their wealth. but to go deeper into the question of president obama's attempts to raise taxes, some people will look at that and say, ok, maybe somebody can afford to pay more. . most people recognize once you dig deeper that, yeah, is he probably going to go and waste it on more inefficient government and, yes, it is going to hurt jobs. it's going to hurt those middle class families that are not getting those jobs right now because the president -- it's not just through this latest tax plan, obamacare has over 20 tax increases, not just on wealthy people but on hiddle class families, some that have hit and people haven't realized yet. >> the fairness point is an

interesting one. i think most of us who descended from immigrants would be hard-pressed to imagine our ancestors coming to this country to get a fairer system of forced income redistribution. and so i appreciate that point very much. i think that the redefinition of the fairness argument is probably a key thing that you guys have talked about and been thinking about the r.c.s. -- r.s.c.'s and thinking all the things we need to contemplate and talk about better. one thing that keeps us awake here is what will happen in the defense sequester. in other words, if this thing rolls over and suddenly there are automatic budget cuts come january 1, there will be relatively indiscriminant cutting across the defense budget. this is something that's seen -- according to scholars it's a very dangerous thing for this country. can you weigh in on that? >> of course. we passed a bill that i was a proud co-sponsor of that shifts those defense sequestration cuts over to nondefense discretionary and in fact we in our

committees, energy and commerce was one of the committees tasked with going and identifying other areas to cut, and we identified those things. again, we took the hits for them. we were talked about cutting things out there that people like. frankly some of them are things people recognize we shouldn't be doing, we can't afford to do. we laid those cuts out there and it's a bill that i stilled stand behind today. but i think the worst thing, to not shifting those cuts away from defense, was to shut off the sequester altogether. we need to get a sequestration to cut spending. i would like to see us shift away those defense cuts to other parts of the nondefense discretionary budget. >> that's -- i feel the same way. look, i said the only thing worse than defense cuts are no cuts at all. we may differ a little bit from your scholarship here. but i do think it's important that we remember strong national defense is what our party's about. and many of you probably remember mr. conaway:'s speech at the

republican national convention. i shaut she captured in a big picture sense what the as we -- what's at stake here. the world is a scary dangerous place but it's less scary and dangerous when america leads. you want to lead diplomatically, you better lead militarily. it's just the way the world works. what's at stake here for our country and frankly for a better, safer planet, america needs to lead and part that have is of course having a strong national defense. so she's exactly right. we should replace those cuts. we've supported that legislation. in fact we have drafted -- a member has put together the two bills that passed this summer. one which would extend all tax rates which had 19 democrats support it. the president wants to talk about a bipartisan, balanced approach. we had 19 democrats say, before the election, we shouldn't raise taxes on any america. and then we also have the defense sequester replacement legislation which would replace those defense cuts with cuts to other parts of the government, put them together in a package. we have that bill ready. we think that's where we need to

go. >> i'm going to give the rest of my time to the audience. my guess is we have a few questions out here. here's the basic ground rules that we usually impose at a.e.i. please wait for the microphone. when you get the microphone say who are you and your organization and put your protest statement in the form of a question. [laughter] so we'll start right here in the front. >> david grant, christian science monitor. just to get back to your point about putting conservative policy into something that families understand, one thing that has been discussed in the aftermath of the elections is the immigration. i'm wondering what you think about how that conference has gone so far, within your peart, if you've discussed it at the r.s.c. and whether there's something you could support that eventually involves some sort of legalization process for people who are already here.

>> we've got some great members of r.s.c. that are very interested in being involved in this debate in the next congress and i think you'll see that debate escalate in the next congress. but i'll mention raul labrador and bob goodlatte specifically because i've spoken with both of them and they've both got great ideas. this is what raul did for a living before he came to congress. he understands this issue inside and out. i think the fact that you're going to have strong conservative voices helping lead this debate is going to be critical to really solving it instead of using it as a political wedge. >> i think like with any -- you have -- you stick with your principles, you're going to arrive at the right policy. so that's what we need to do here. we need to remember that, you know, we shouldn't just give amnesty but for people who legally come here, we want to welcome people, we want it to work better, faster process, so more americans who want to come here and experience what all our families have experienced have that opportunity.

i would just tell you, and steve has done this as well, if you've never had a chance to go to or if you've ever had a chance to go to a naturalization ceremony, i've done four of them in our district and they're actual court proceedings. they're an amazing thing. when the new citizens say the oath and they realize they are now a citizen of the greatest country ever, the smile on their face, they all want to get a picture with me and i had nothing to do with. it it's amazing. it is a special moment. and i've done four of these. so we want to make this system work a lot better. and a lot quicker for those kinalds of folks. -- kind of folks. and congressman labrador is focused on this issue and i think he's going to really, really help us in the debate. his office is right next door to mine. he's a great member of the r.s.c. i think we're going to move forward and get something positive done. >> let's go over to -- your hand was up next. >> bill johnson, freelance writer. while i agree that the individual part of the tax code

is probably stupid and the corporate part is broken or the other way around, i worry about the center part and that's the small business people. especially as we talk about revising the corporate tax rate, maybe bringing that down to 20% or 25%. if we still have individuals paying, you know, their small business taxes at 35%, that's a killer. do we need to create new tax bracket for small businesses at maybe 10% and just unleash small business? >> potentially, what we certainly need is a simpler, flatter, fairer system. why not just a two-rate system? you get so many thousand is exempt from taxation and then it's at 10% to a certain level and then 20 prgs and that's the end of the game and you get rid of most deductions and credits and you probably have to keep the mortgage interest deduction, you keep the charitable -- you know, so -- but something bold like that, here we are. bold and simple.

and frankly if that top rate is low enough, then maybe we don't have the big concern you just highlighted between the c corps' or l.l.c.'s. >> you were next. >> i'm elizabeth st. claire and i'm a realtor, blogger, tea party activist. i'd like to know why the republicans specifically mitt romney in his campaign, nobody would listen. they wouldn't even listen to henry olson from a.e.i. he had words of wisdom. michael about a rone. i contacted -- just personally, a citizen, contacted the romney campaign for several years, raised funds and whatever. they wouldn't listen. and it's very, very frustrating that regular people who don't belong to fancy campaigns just have regular i.q.'s, nothing to touch yours or whatever, but who

-- >> you might be surprised. >> whatever. we, i guess with all due respect, we know how to communicate with people on the ground and quite frankly the republicans have to get cooler, they have to -- and i hate to say that, but in a country where the number one show is "two and a half men," we just have to communicate better. with humor, with some great sound bites, and we need to do a much better job and i'd also just like to say, if you don't mind, what happens to men when they get on capitol hill? those men who used to be marines or who were soldiers, i mean, could they just loosen the tie? this is war. this is absolutely war. and honestly we have a dysfunctional, very dishonest president. please fight back. thank you. >> tough guy. we got jim jordan, former all-american wrestler here.

how do we fight back, jim? >> i've said it a couple of times. you present the principles that we know work and that have worked historically for this great nation. and you do it with a smile. i always loved mike pence's line. he said, i'm a conservative and i'm not mad about. it that's important. you do it persistent, courageously, but with the smile because when you have to choose, why not be happy about it? that's straight from scripture. if you have good news, have a smile on your face. >> we can absolutely improve communication. i think you saw that in a number of campaigns. every campaign is different. which is why you might have a congressional seat where the republican, one who is a staunch conservative, and yet mimmi -- mitt romney might have lost, or the senate candidate might have lost. communication is critically important, how we talk about the conservative things we believe in and how it helps improve family's lives. and going into those nontraditional places.

we've got colleagues who go on to telemundo and univision. not everybody does. we need to be doing more of that. >> a lot of work to be done in communications. we've expanded a lot at a.e.i. for that reason. i think it's got the republican party's attention. let's go over to this part of the room. all the way in the back. all the way in the back corner. >> thank you. rick from fairfax. i just -- i guess the main things that the republicans were remiss on their communes was the charge -- communications was the charge that wealthy people -- the income over $200,000 is somehow taxed at a lower rate. that it's regressively taxed. according to the c.b.o., that is not true. i've said this myself a couple of times on c-span, i was emailing american crossroads and those guys, if you don't respond obviously 55% are going to believe it's true. now in romney's personal situation, which i'm not

completely familiar with, if he paid an effective rate of 14%, if on average the rate rises as income goes up, as the c.b.o. has stated, that means somebody else above $200,000 is compen say thing for that -- compensating for that. neast that's number one. my question is, for the upcoming debt negotiations, can the republican conference insist on at least $250 billion of savings for 2013? so you authorize $750 billion, if it's going to be $1 trillion again projected deficit. you insist -- can you insist on $250 billion? >> we certainly should insist on some down payment on some fiscal sanity in the congress, in the government.

i think back in my response to the first question we talked about cut, cap and balance and that's what we laid out in that plan. let's make a down payment on this first year and do something that politicians never do which is reduce spending. of course the old game is always, and you all know this, give us your tax money now, we promise in the future we'll cut spending. i mean, we really, really promise. really, really, really promise. and give us your money now. and it never happens. so it's always, raise taxes now, we promise to cut spending in the future, increase the borrowing authority, we promise to cut spending in the future. the cartoon last week was the one with lucie and the football and charlie brown. the american people are like, we're not buying that american. and we did it the last time. i agree we should and that's certainly something we'll be pushing to do. in the context of this debate, but frankly also in the context of what -- the debt ceiling debate that takes place in february, march of thecks year. >> let me follow up on that

question with a related one. it's one thing to stand up to the president on this but when we look at the data we know that government spending is a percentage of g.d.p. has risen under republican majorities more than under democratic majorities. that's something that creates a lot of discomfort with the r.s.c. and r.s.c. leadership. how can we deal with that a little bit better? >> one is to provide a vision for where we have to go. and we have done this the last three years. and we put on alternative budget. we think by putting on a budget, it shows a path to balance in a reasonable period of time. our one last year balanced in 5 1/2 years, according to c.b.o. we think that helps make the budget that ultimately passed with republican support, we think that makes it better and gives us a better chance to market that. we show that, i think that part of the vision and how this is going to help your kids, your grand kids, your family, your community, if we actually get to balance what that means for opportunity, for growth, that same message.

>> and it's an important point because i came here in 2008 and one of the things that had frustrated me when i ran for congress, i was a state legislature, our state has a balanced budget amendment. louisiana. we have to balance our budget every year, like most states. yet you saw during a republican administration with a republican house and senate, you saw spending growing dramatically. now, we'll point out, when the republicans were fired in 2006 for spending too much money, and they were spending too much money, the deficit was around $140 billion. today it's over $1 trillion. and so i think you've got to recognize that the bigger issues, and when we get to the next debt ceiling negotiation, i think that's going to be the one big leverage piece to actually go for the big, the big solution to this. and that is you've got to reform the big three entitlements starting with medicare. we've put that on the table not only in the paul ryan budget that became the house budget, but in the r.s.c. budget, in a more aggressive way where we said, we know we're going bankrupt in 12 years. for seniors 55 years or older,

nothing's going to change for you except it doesn't go bankrupt but for people younger, it's going to have to be reformed. and by the way you'll never balance your federal budget until you make major entitlement reform and that's got to be part of this discussion in the next debt ceiling negotiation because the debt ceiling is a symptom of a problem. the president's going to make it out to be the only problem and anybody that doesn't just give him the money is irresponsible. what's irresponsible is not addressing the root of the problem and that is that we're spending too much money and we're going to continue to do it until we reform the big entitlements. >> here, right to the middle. >> this question may be for all three of you. senator demint is moving over to a friendly competitor. it will be interesting to see what comments all three of you may have on that event. >> you start. >> really? >> yeah. [laughter]

>> the heritage foundation is a pioneering group. they've done superimportant work that's influenced all of us. i'm personally a donor to heritage and a proud one at that. and i know that -- >> is that a challenge to demint? >> these guys have been -- have done a lot over there as well. under ed full in her, it's been a truly pioneering organization. i think this is the kind of move that can keep them in the line of sight for american conservatives. they are a conservative movement think tank. and i think it's a smart move. i think he'll do fine. there's a lot of speculation about how he's going to lead in a different way and the truth of the matter is you never know how a leader is going to lead. when i came to a.e.i. four years ago, january 1, 2009, almost exactly four years ago now, i came from syracuse university. i was a professor of business and government and i read in the paper as soon as i got here that a.e.i. had checked out of the war of ideas.

it was the road to irrelevancy. because some boring guy with a h.h. -- ph.d. from syracuse, how interesting can that be? and 12 months later i read that it's being led by a right-wing maniac. it's the same guy. [laughter] the truth of the matter is you don't know how anyone is going to lead and i'm looking forward to -- i'm friends with jim demint already. i'm looking forward to cultivating that even more and being as helpful as we can be. good times may be around the horizon for those guys. >> we'll his voice in the senate but been a long-term strong relationship and that will continue with him at that helm. and we'll miss ed. >> of course dr. fulner -- i mean, a tremendous organization. and as steve said, the r.s.c. inherented and linked amazingly for years. ed had a teller's job way back whenever that was.

so that's where ed got his kind of start in this conservative business. and then senator demint, the bad news is we're going to miss him in the senate. there's been no one better than standing up for the principles we all care about that be jim demint. and he's an honorable, just wonderful guy. i told him to run for president several months back. and it's a great -- >> turns out he did. >> he did. he did. and i'm going to tell him, arthur says he has to write a check now to a.e.i., too. [laughter] >> go over back to the left here. gentleman in the back. >> hi. recently you talked about providing a vision for the future for conservatives. recently there was a paper that did. it took a rather brave position on intellectual property. reform. and we come to find out that he's been fired. do you think that's a wise

decision for a party that needs to be reaching younger voters in and when can we expect a more balanced -- [inaudible] >> i take it you're talking about copyright in particular but there were other white papers as well. in general, if you look at where the r.s.c. is going to go if we're going to be effective, it's going to be the members that have to unite and fight for those principles that we believe in and do it in a unified way if we're going to get conservative wins. the next to years are going to be a challenge. we're going to be swimming upstream in a number of different fronts with a lot coming at us. and we know that. we're looking forward to that challenge. but the only way we're going to be successful is if the members of r.s.c., and obviously the staff provides a critical role of giving us the information and the tools we need to go to battle, but at the end of the day it's only the membership and it's a strong membership, maybe 170 when it's all said and done, if we can unite as members of congress to shape that vision in a conservative way, then we'll be successful. and so my main focus is going to

be uniting our members, that know what our task is, that know how uphill of a road it is but also who are focused and determined to fight those battles. >> let's go over here. >> thank you. >> we have a mike coming to you. >> sure. i was really struck by your focus on families and on principles. one principle that i have not yet heard is the idea that washington politicians cannot solve these problems alone and that conservatives should think about strategies for empowering states to help conservatives in washington solve these problems. one idea that i've talked about with paul is the idea of a house rule included in the house rules package. that would recognize the 10th amendment authority of states to

limit the scope of an article five con strength they threaten which might be the only way to force congress to propose something like cut, cap and balance. what kinds of questions are you having now about empowering states as you think about the next congress? >> i'll take that because i've already spoken to my predecessor in the seat that i hold today, bob jjindsle, as the incoming head of the republican association. we already had this conversation. because in the next two years, as chairman of r.s.c., i want us to be working closely with the gonches, a majority of the governors in this country are republican governors. and just like we propose conservative solutions in the house through r.s.c., those governors have great incubation ideas about how to successfully tackle problems. they've already done it. obviously bobby, we've seen upclose a number things he's done successfully in louisiana to reform our state. but you've got great experiments like that in so many other states and we can invoke those great ideas, working hands in

hand, not only through hearings at the legislative level. but also sharing the successes that governors have had that go a different way from the obama big government borrow and spend approach. those governors have to balance their budgets and they're doing it while not only taking care of the needs of their state but in many cases far exceeding and outpacing economic growth. much better jobs, numbers lower, lower unemployment numbers in many of those states where they're led by republican governors who are approaching the challenges of this nation through conservative solutions. so we're going to be working with them. governor jindal is very excited about that opportunity, too. >> let's go back here. right hereality this table -- here at this table. >> hi. i'm bren edwards, i'm from "politico." i wanted to ask, recently there's been a lot of press because top conservatives -- [inaudible] and they're saying it's not because -- it's not

because of the way -- it's -- [inaudible] i would like to know if you have any comments on that? >> well, i think it's wrong. i think it's unfortunate. i think it's not healthy. i think it's wrong. here you've got -- and i think it's largely because these guys have voted against some of the big issues -- they vote geth against the debt creaming, they voted conservative. i think it's unfortunate it took place. and hopefully there's a way to help fix it. we'll see going forward. but you think about, i mean, the exam, come on. tim huelskamp from kansas represents 70% of the state. the member from that district has been on the ag committee for like -- since there's been an ag committee, since kansas has been a state, 150 or whatever it is. it's been a long, long time. and he gets kicked off that

committee and oh, by the way he has a ph.d. in ag policy. it make noes sense to me. so i think it's wrong and unfortunate and hopefully it won't happen again. and hopefully there's a way to remedy it for the parties. >> i too think it's very unfortunate that members were removed from their committees. one of the things, as a steering committee member, i fought to get more r.s.c. members on key committees. but beyond that i've talked for years not just through this campaign for r.s.c. chairman, it was a plank of my campaign for r.s.c. chairman to get more r.s.c. members on the steering committee. and that's something i've talked about for a number of years. but talked about that specifically as part of the campaign running, that i want to formulate a larger block of r.s.c. members on the steering committee and we'll be working on that in this next two-year term. >> right over here in the corner.

>> national journal. you both have made clear that you don't think the tax cuts would be effective or the solution to this problem. >> tax increases you mean. >> tax increases, excuse me. but you've also made clear that you want spending cuts. is there any room for compromise? if democrats agree to substantial spending cuts, is there room for compromise on that top rate, somewhere between the 35% and the 39.6%? >> no. because it doesn't -- you got to step back. what's going to help our economy? everyone knows washington has a spending problem. a big one. trillion-dollar deficits for the last four years, heading to our fifth year. everyone knows it's a spending problem. we've heard it a thousand times, we moms -- promise. i always tell folks, this is politicians making the promise. we promise, give us some more money and we'll use it to reduce the deficit and the debt. it never happens. so it's a joke to go down this road.

you just can't. i know we're in a tough situation because of the decisions made in the past, on january 1 taxes go up. well, you know what? that's because we made bad decisions in the past and here we are. but that doesn't mean you change and go against the things you know work and will actually solve the problem. so of course you can't be for that because, a, it's bad policy. it's not going to help grow our economy which is what we need. it's not going to create jobs. and politicians, you can't trust them. particularly the guys in congress, for goodness sake. you cannot go there. >> and you got to go back and look historically. we've done this. we've looked historically. we've never found a toimin modern history -- time in modern history where raising taxes have led to a balanced budget. it's never happened. we found a number of areas where controlling spending, you know, the president likes talking about the, you know, he and bill clinton have this great affinity for each other and he loves talking about the clinton tax increases as if that was what bald the budget. it didn't balance the budget. it wasn't until later after that

and a lot of those people had voted for that tax increase got defeet, republican congress comes in and finally controls spending that we got to a balanced budget with economic growth. but if you look in the 1960's, you look at the 1980's, you look in the 2003 tax consults that we're debating right now -- cuts that we're debating right now, the federal government tax cuts took tremendous increases in revenue. you want to get new revenue? under those 2003 tax cuts, within three years the federal treasury took in 40% more money by cutting taxes. so this myth that you need to raise taxes to get more revenue, i would argue and history would prove that tax cuts generate the revenue through economic growth to get you to a balanced budget. and so that's really the problem. should we focus on fixing the problem or just appeasing, you know, the president's pound of plesh that he wants to get out of the class warfare he played during the campaign? >> so you're saying that the tax increases, tax rate increases that are proposed by the

president are more a statement of philosophical principle than economic principle? >> i think it goes to his class warfare message. more than anything. history doesn't back up that it's good policy. he himself back in 2009 said it's bad for economics. that if you increase taxes in a bad economy, it will make the economy worse. the president made that case in 2009. and we're still in a bad economy. >> wonderful point. now i'm in the unfortunate position of calling the last question here today. so i'm going to leave the last question to janet here in the front table. >> hi. jan bates, a conservative voter. would speaker boehner be able to pass the compromise on a tax rate increase without the r.s.c.? >> i don't know. [laughter] look, if it's got a tax increase in it, i'm not going to be for

it. and i think there's lots of members who won't be for it. you but you don't know. the r.s.c. doesn't always function as a unit, as we all know. as i certainly discovered over the two years. i knew it going in but you see it firsthand when you're the chair and steve will have the same wonderful experience over the next two years. so we'll see. but we've said it several different ways. >> i'm focused on working on a solution to this problem. it's a serious problem. the president surely hasn't put out a serious proposal. we passed solutions to this problem on the house already, many with bipartisan votes. the only things the president's talked about so far have been very partisan. if you campaign on a promise twhee work in a bipartisan way, we're calling on the president to fulfill his campaign promise, work in a bipartisan way, and there's a good place to start

with some of the ideas that we've already put out there that would not only be proven to work, but would actually focus on economic growth rather than growing the size of government through higher taxes. >> i want to say thank you for service to jim, good luck to steve and god bless you both for your service to our country. [applause] [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute] >> more about the fiscal cliff coming up in a minute. the house returns live in about a half hour from now at 5:00 eastern to consider a motion to negotiate with the senate on a compromise bill that would set penn programs and policy for the next year. recorded votes will happen this evening around 6:30 eastern. and tomorrow, eight bills

including the sale of asthma ilan-- inhaters -- inhalers. live house coverage as always here on c-span. and now today's white house briefing with press secretary jay carney. he talked about where things stand in the fiscal cliff negotiations and responded to house speaker boehner's criticism of president obama on the issue. we'll show you as much of this as we can until the house gavels back in at 5:00 eastern. >> good afternoon. welcome to the white house. thanks for being here. i have no announcements to make at the top so i will go straight to your questionless. mr. henry's disappointed that i have not a single announcement. jim. >> thanks, jay. the speaker, as you know, spoke today and turned the

conversation over to the spending cuts and the fiscal cliff negotiations. two questions on that. one is, does that suggest that there is movement, so we're no longer talking about tax cuts or tax increases? and where is the administration, i know you guys have argued back that they have provided details on spending cuts, but are you prepared to offer more? today you have a letter from c.b.o.'s urging that spending cuts, entitlement adjustments and so forth be a multiple, a greater multiple than revenues. is the white house prepared to do more on that front? >> let me take your questions in relative order. first of all, i did hear what the speaker of the house had to say. and i would note that if there is one fact that should not be in dispute it ought to be this,

the president, unlike any other party to these negotiations, has put forward detailed spending cuts as well as detailed revenue proposals. it is a simple fact that the president put those forward to the nat so super supercommittee in september of 2011. and that he again in the process of these negotiations put them forward as his position when it came to both the revenue that was required to achieve the kind of balanced deficit reduction package on the scale of $4 trillion that was necessary, as well as very specific spending cuts, including savings in entitlement programs. and again, it's not a mystery. we've seen this before.

this is the document that contains the specific spending cuts. the speaker of the house sent us a proposal that was two pages long that included one sentence on revenue. the proposal here includes i believe from pages 17 to 45 details on proposed spending cuts by the president. pages 17 to 45. i recommend them to you. now, it is entirely our expectation that republicans may not agree with all of our spending cuts. republicans may want to propose additional spending cuts. and the president has said that he is prepared to make tough decisions. he has said that he's not wedded to every detail in this plan. and that he understands that a compromise requires all side to -- sides to accept something short of the ideal and he's committed to doing that.

what we haven't seen from republicans to this day is a single specific proposal on revenue. and in fact we've seen less specificity from republicans on spending cuts than the president himself has proposed. so that's point one. i think the letter you mentioned from the executives at the business round table adds to the growing chorus of voices from a variety of sectors of both our economy and the broader american public demonstrating a desire for compromise, demonstrating that there has to be a balanced approach, an approach that includes revenues as well as spending cuts. so we welcome that and agree with it. furthermore, on the ratio question, the president's proposals have taken together shed on roughly $2.50 for every

$1 in revenue. >> you're counting the $1 trillion from the budget act? >> everyone is counting the $1 trillion from the budget act because it should be counted. let's go back, on the spending cuts. while we have yet to see a single proposal from republicans on revenues, the had the pat has signed into law, law of the land, $1 trillion in spending cuts and he has proposed additional specific spending cuts as part of this document that i showed you. so absolutely. when we talked about, you know, $4 trillion as did the simpson-bowles commission and others, that was prior to the signing of the budget control act, and the $1 trillion in spending cuts that were greed to by all sides and signed into law and voted for by congress were part of -- had there been a grand bargain, part of the $4 trillion. >> one of the items in that you just showed us includes some medicaid adjustments that

presumably are part of this. part of the president's you are a -- offer. but there were reports yesterday that h.h.s. is backing off some of these medicaid hinges that would allow for a blended percentage of rate adjustments of states. if that's true and if you are backing down from some of these proposals, what does it say about -- >> let me say a few things about that. while there has been a call for greater specificity and where are the cuts, the fact is this document was produced more than a year ago. and has been available to everyone in this room for that time. and everybody on capitol hill. so that is a fact. as part of that fact, there has been some changes -- there have been some changes in the world that affect some of the proposals here including the supreme court's decision and so a very small percentage of the provisions in here, the proposals in here that affect medicaid, we would no longer put forward but would absolutely

make up in terms of the size of savings in other ways. but we're talking about 10% here, nothing too sizable. >> i want to follow up on that specific question. is it in the hundred billion dollars in medicaid savings? >> i don't have the details in front of me. it's not on that scale when we talk about the overall percentage of -- when we talk about the overall amount of entitlement program savings and -- as well as the health care savings. >> wasn't this also on the table during the last fiscal cliff negotiations or whatever it was called at the time? the debt ceiling negotiations? wasn't that one of the items on the table that the president had already agreed to? $100 billion -- >> again, i don't have the specifics for the different generations here. but time has passed and there's been some impacts on the medicaid program that change our calculations on this. but we're not talking about a sizable portion of the proposed specific proposed savings from

health care entitlements or overall savings from mandatory indictment programs. and -- entitlement programs and we would find our savings, we will propose other savings to make up for the difference. the fact is that the vast majority of these proposed savings account for a higher degree of specificity than we have seen by far from the republicans. and -- going back to the revenue side of this we've seen exactly no specificity from the republicans except for a vague promise of an insufficient number, $800 billion in revenue, gleaned from unnamed cap deductions. so if the issue is where are your proposals, i think we've answered that question in full. acknowledging that we're not going to get exactly what we put

forward. that there's a discussion of negotiation that has to take place and the president's been very clear that he understands that and he'll make some tough choices in order to reach a balanced proposal on the scale that he's talked about. >> sorry. the speaker's comments today seem to indicate that despite his meeting with the president on subbeds here at the white house, that very little progress has been made. does the white house share that assessment? >> i don't think that's what he said. i think he said that the discussions have been cordial. we would agree with that. and we think that lines of communication remain open. but what we're not going to do is give a daily or hourly assessment of whether or not progress is being made or what specific items are being discussed. because we don't think that's fruitful or helpful toward achieving the goal that we think we all share which is reaching a compromise that congress can --

congress can pass and the president can sign into law. >> you don't think -- [inaudible] >> i answered this question yesterday. i don't think it is helpful to give hourly or daily readouts of progress because our interest is in achieving a workable compromise that reflects the principles the president has talked about so clearly and has put forward before the american people for so long. when it comes to having balance and making sure that everyone pays their fair share and as part of that, requiring that republicans acknowledge and accept that rates are going up for the top earners in this country, and that a certain amount of revenue has to be part of this deficit reduction package in order for it to be bet sore we're not asking seniors or the middle class or students or families with disabled children to beart burden in exchange for some vague promise that the top

earners in this country might pay a little bit more down the road. that's not the kind of deal that can work. but there is a deal out there that's possible. and we do believe that the parameter of a compromise are pretty clear. what is required is agreement by republicans to some specific revenues that includes raising rates on the highest earners and some decisions made in both-stage process that we've put forward and i think the republicans agree on how we move forward on spending cuts and broad entitlement and tax reforms. so these things are possible but they're less possible if we try to negotiation them on an hourly or daily by a sills in the media. but having said that i understand and i sympathize with the desire for more detail. and if it weren't for the broader interest here which is

in trying to allow some space for the parties to see if they can achieve a compromise, you know, i'd be spilling my guts from here. >> in terms of the deadline, as the end of the year draws near, at what point do you have to have some kind of agreement, at least in principle, to give congress enough time to pass it? >> that sounds like a question for congress. and i wouldn't hazard a guess. >> i want to go back to something that vice president biden said on friday. he seemed so suggest that there was room to negotiate on the tax rates for the top income earners. he said we can negotiate how far up but we think it should go up. is that something the president grease to? -- agrees to? >> i would point you to something i have said and others have said, including the vice president, and that is, there is a clean and simple way to do this. that achieves the kind of

revenue package that is necessary in terms of its scope for the balance that's required in a fair plan for broad deficit reduction. extend tax cuts for 98% of the american people, do nothing for -- on rates for the top 2%, that means you don't have to vote to raise taxes, you simply let current law stay as it is, which would result in those rates for top earners, above $250,000, going back to the rate from the clinton era, and then find those targeted loopholes that you can close and deductions that you can cap that, combined with the revenue gleaned from raising rates, produced the size and scope that's necessary for the balance that we've talked about. as i've said before, there's no, you know, the fact that there

could be theoretical ways of reaching that goal that are different from the ones proposed by the president may be true but we have yet to see anything along those lines from our negotiating partners. any specificity at all. or any acknowledgment in any concrete way from republican leaders, even that rates have to be part of this. >> it seems like the vice president is signaling they don't have to go all the way up to that 39.6% figure. >> i'm saying that a discussion about what's theoretically possible could go on forever. what is concretely possible is that we extend tax cuts for virtually, you know, 98% of the american people, allow rates to rise for the top 2% of earners and address the loopholes and deductions in a way that achieves the kind of revenue package that we need for a

broader deficit reduction goal. that's the way to do. it talking about what's imaginable is one thing. what we haven't seen is anything like a concrete proposal from the republicans. when it comes to revenue. >> i want to make one more stab at this question as well. a lot of people saying you have to get a broad framework by this friday. does the president see it that way in order for this to get passed by friday? >> i'm not going to set deadlines. i don't think that's helpful to the process. you can certainly either speak directly with people on capitol hill or have your colleagues up there do that, to find out what their assessments are, about how long it would take congress to act on certain possible legislation. our focus right now is working to see if we can reach an agreement that helps us avoid the so-called fiscal cliff and also achieves the broader deal which would address this longer term deficit challenge that we face in a way that helps the

economy grow and create jobs. that's our focus at the moment. and we believe there is time. yeah. >> the clock is winding down on secretary clinton's time at the state department. she's expected to leave at the end of next month. and there's been a lot of speculation that a decision would have been made now on who would replace her. what is the holdup? >> there's no holdup. the president has made no decisions and i have no personnel anougesments to make -- announcements to make. >> about the decision to allow corporate donations for the inaugural festivities, why did the president change his mind on that? >> i would refer to you pick which has been set up and i think is taking questions on that. i haven't had that discussion. >> the president was part of the transition committee in 2008 and 2009, when they announced that the reason they were settinging new limitations was --

[inaudible] to put the country on a new path. this is not a pick decision, this is a presidential decision. >> i understand. but pick is handling questions like that. i haven't had the discussion with anyone here. so i would address your questions there. and i'm sure they are taking questions like that. >> i want to continue on that. is the thinking that the president, the white house wants to get this fiscal cliff situation settled before the president starts making any announcements about nominations? >> the president's working on a number of issues including resolving the fiscal cliff, working with the speaker of the house and other congressional leaders. and he's working, you know, he's certainly engaging in discussions about some of the personnel decisions that we all know he will be making.

but i haven't got a time line and -- for you about when you'll hear those announcements and since, as previous questions indicate, i can't give you a day for when we're going to resolve the fiscal cliff challenge, i wouldn't say that any other decisions or announce thes are dependent upon that. >> you don't really want to give any kind of characterization of what happened in that meeting between the president and speaker boehner? but the white house has often talked about how there's a need for certainty in the market for businesses to know what's going to happen so they can start hiring or middle class americans to know that tear taxes are not going to go up -- that tear taxes are not going toon -- that their taxes are not going to go up.

so are you more optimistic now that this deal will get done? >> i think the best thing we can do is take concrete action. by having the house pass the tax cut for the middle class. the president would sign it into law. the best thing we can do for business confidence is produce a compromise that averts the fiscal cliff and achieves a broad-based, balanced deficit reduction package that helps our economy grow and helps it continue to create jobs. the ups and downs that always take place in negotiations like these i think are probably not all that conducive to creating certainty because as you've seen from the variety of rumors that come out, one hour it's the talks are over, there's no progress. the next hour is there's progress and a lot of tea leaf

reading. i don't think having me party in that kind of speculation probably doesn't help the process. and like i said, i really understand there's great interest in this. not just in this room but around the country. and we all here appreciate that and this is important. and it's because it's important that we believe it's most helpful to the process, to try to let those who are working on these challenges and trying to reach a compromise work with as much -- with the ability to focus on that work rather than the kind of conversation on the outside as much as possible. >> when you say the work, what kind of work are you talking about? lines of communication are open. so as far as i can tell and based on your comments, there are no ideas being band idea back and forth between the white house and congressional republicans.

it sounds like we're stuck. >> again, major, i'm not going to read out what's happening. and so i would neither con ferm or deny any -- confirm or deny any characterizations about what's happening or the progress that's being made. beyond the fact that we confirmed the meeting the president had. we've confirmed various phone calls and other activity in part because some of it takes place on capitol hill between members of the president's team and you can't really keep that secret. but i'm not going to -- >> it sounds as if there's nothing actually being exchanged between both sides who have to create a deal. >> that's respondsing to the public statements by the speaker of the house. i'm not going to characterize internal negotiations. >> ok. can you tell us and the public what the coverage will be of the swearing in of the president on sunday? >> i don't believe the decisions have been made. and i'm sure once -- >> [inaudible] >> i don't know that it's open coverage. i just don't have an answer for

you on that. but i'm sure there will be and we'll make -- i'm sure there will be an answer for you. we haven't made -- i'm telling you that we don't have an answer for you yet but i'm sure we will soon. >> you've invited all of us to look at the detail us when talk about the mandatory spending cuts. i've taken you up on your invitation. the $240 billion, not the health care savings, but the other entitlement cuts that are identified, would you say those represent efforts to make the government smaller? and reduce the size and scope of government activity? is that a priority for republicans? >> i think this president's committed to reducing spending by government and spending including tax ex pennsylvania pendstures, as -- expenditures as the simpson-bowles commission identified them. and to have a leaner, more efficient government, and a more effective government. that's been reflected in the steps he's taken to reduce spending, what he signed into law last summer represented one

of the largest cuts in discretionary spending in generations. so -- and he's continuing to be committed to doing that. what he does not believe is helpful is making cuts in areas of investment that actually help the economy grow. like research and development or education. this is some of the debate we had. and i would note that the irony of this, and it goes to the broader point about i think some misunderstanding of about what we're contemplating. i think what people don't understand is that fiscal cliff is not about spending, it's about cutting spending too fast and the impact that would have on our economy. >> i understand that. but we're talking about other, not health care mandatory savings that the administration put forward. $100 billion that have $240 billion is better i.r.s. enforcement, meaning more rapid and efficient gathering of tax revenue, and the $61 billion financial crisis fee. which is a tax. and then there's a $44 billion changing in payment on timings

that only a one-time only savings, and $27 billion from higher fees from federal employees. republicans would look at that and say, that's not reducing the size and scope of government, that's fees, better i.r.s. enforcement, and making federal employees pay. that's not changing anything structurally in the government. >> here's what i would say. as demonstrated by yours remaintation, there's specificity in there. we haven't seen any specificity from republicans. no question republicans may have different proposals but we haven't seen them about how they would reduce spending. >> [inaudible] >> i don't have the item by item here to go over. i have the document but i'm not going to go item by item with you. there are significant savings represented that the president has put forward. if the republicans have specifics that they want to put forward they ought to do that. and we can discuss about how we achieve that kind of balanced

package that i think most people agree is necessary to help our economy and most people agree is fair when it comes to everyone bearing the burden farrell and equally to get our deficit under control. >> to the major's point on the size of government, if you look at labor statistic, there have been 135,000 more federal workers hired during the president's first term. that's about 95 workers per day, every day of his first term is that really reducing the size of government to major's question about, since this whole exercise in part about is -- is about reducing the size of debt, is the president proud of the fact that the number of federal workers is increasing and you see in the second term, any decrease in that number coming? >> i think the president has put forward a proposal to streamline and reorganize the variety of agencies that deal with commerce in the federal government and exports and as part of asking congress for the authority for that kind of reorganization that existed up through president

reagan, he has made -- he has added as an incentive a component of that request that would require any reorganization to save money for the taxpayers. so save federal dollars. so i think that demonstrates his commitment to making it more efficient and effective federal government. the broader issue here is how do we make choices that ensure that the middle class is protected, ensure that our economy continues to grow, ensures that it continues to create jobs, that we are making investments in education and research and development and infrastructure that, you know, the chamber of commerce and the business round table, as well as the president of the united states all agree are essential for long-term economic growth. that's the vision the president has, that's the vision he talked about during the campaign. again, we have put forward a specific set of proposals on

both the revenue and the spending side. we look forward to specificity from the republicans and the president believes that we can reach an agreement if everyone acknowledges that they're not going to get everything they want and everyone acknowledges that the agreement has to be balanced, that it cannot -- we had the debate about whether we should put this all on the backs of senior citizens and middle class americans and families with kids who have disabilities. and i think that debate was settled. the american public by and large does not support that approach. the approach they do support is one that asks everyone to pay their fair share. it includes asking the wealthiest americans to pay a little bit more. but it also demandses that we all contribute. and -- demandses that we all contribute. and our -- demands that we all contribute. and our government performs efficiently and effectively. and the president understands that is he going to have to make that is he going to have to make some tough